Question

# ABC Corp had the following inventory transactions for the month of December 20X5 Date transaction type...

ABC Corp had the following inventory transactions for the month of December 20X5

Date transaction type amount (units) price per unit

Dec1 opening balance 400 \$5.12

Dec3 purchase 1100 \$5.23

Dec15 purchase 900 \$5.48

Dec22 purchase 250 \$5.66

Dec2 sales 300 \$6.50

Dec 6 sales 800 \$6.50

Dec 18 sales 700 \$8.00

Dec25 sales 150 \$8.00

What is the value of the inventory held by ABC as at December 31 20X5 if the company values its inventory using the weighted average cost formula and uses a perpetual inventory system?

Round all calculations to two significant decimal places for example \$5.66.

 Particular Quantity change Actual unit cost Actual total cost 01-Dec Opening balance 400 \$5.12 \$2,048 02-Dec Sales -300 03-Dec purchase 1100 \$5.23 \$5,753 06-Dec Sales -800 15-Dec Purchase 900 \$5.48 \$4,932 18-Dec Sales -700 22-Dec Purchase 250 \$5.66 \$1,415 25-Dec Sales -150 31-Dec Ending inventory 700 Total purchase cost =\$14,148

weighted average unit cost = \$14,148 / (400+1100+900+250) = \$14,148/2650 = \$5.34 (rounded off)

Value of ending inventory = \$5.34 x 700 = \$3735 (approx.)