Question

Zara recorded the following data:

Date Units Cost

1/1 Inventory    500 $20.

1/8 Purchased 1,000 30

1/12 Sold 1,200

Assume Zara is using the weighted average, the ending inventory Balance to be reported on the Balance sheet at January 31 is:

Select one:

a. $12,500

b. $32,040

c. $8,000

d. $24,000

Answer 1

Answer:
Particulars	Units Purchased (A)	Cost per Unit (B)	Total Cost (A x B )
1 / 1	500	$ 20	$ 10,000
1 / 8	1,000	$ 30	$ 30,000
Total	1,500		$ 40,000
Weighted Average Cost per Unit =	Total Cost / Total Units	$ 40,000 / 1,500	$ 26.67
Ending Inventory =	Total Units (-) Units Sold        = 1,500 (-) 1,200        = 300 units
Weighted Average Ending Inventory Balance to be reported =	Weighted Average Cost per Unit              x Ending Inventory =	300 Units x $ 26.66667	$ 8,000
		Optiom (c ) is Correct

answered by: anonymous