Question

Intercontinental, Inc., uses a perpetual inventory system. Consider the following information about its inventory: July 1, purchased 10 units for $910 or $91 per unit; July 3, purchased 15 units for $1,590 or $106 per unit; July 14, sold 20 units; July 17, purchased 20 units for $2,300 or $115 per unit; July 28, purchased 10 units for $1,190 or $119 per unit; July 31, sold 23 units.
Using weighted average, the cost of goods sold for the sale of 23 units on July 31 is ____ and the inventory balance at July 31 is _____.

Answer 1

Answer:

Using weighted average, the cost of goods sold for the sale of 23 units on July 31 is $2,504.70, and the inventory balance at July 31 is $ 1,306.90.

Step-by-step explanation:

Since Intercontinental, Inc., uses a perpetual inventory system, and on July 1, purchased 10 units for $ 910 or $ 91 per unit; on July 3, purchased 15 units for $ 1,590 or $ 106 per unit; on July 14, it sold 20 units; on July 17, purchased 20 units for $ 2,300 or $ 115 per unit; on July 28, purchased 10 units for $ 1,190 or $ 119 per unit; and on July 31, sold 23 units, to determine the average costs and the inventory balance as of July 31, the following calculations must be performed:

(910 +1590 + 2300 + 1190) / (10 + 15 + 20 + 10) = X

5990/55 = X

108.90 = X

108.90 x 23 = 2504.7

(55 x 108.9) - (43 x 108.9) = X

5990 - 4683.10 = X

1306.90 = X

Using weighted average, the cost of goods sold for the sale of 23 units on July 31 is $ 2504.70, and the inventory balance at July 31 is $ 1,306.90.