Question

Shown below is activity for one of the products of Denver Office Equipment:

January 1 balance, 690 units @ $60 $41,400
Purchases:
January 10:	690 units @ $64
January 20:	1,220 units @ $66
Sales:
January 12:	1,000 units
January 28:	800 units

Required:

Compute the January 31 ending inventory and cost of goods sold for January, assuming Denver uses average cost and a periodic inventory system. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.)

Ending Inventory:?

Cost Of Goods Sold:?

Answer 1

Denver Office Equipment

Average cost :

Date	calculations	$
January 1	$ 41,400 / 690 units	$ 60
January 10	((690 units × $ 60)+(690 units × $ 64))/(690+690) units	$ 62
January 20	(((1,380-1,000)units × $ 62)+(1,220 units × $ 66))/(380+1,220) units	$ 65.05

Ending inventory = Opening - Purchases - Sales

= 690 + (690+1,220) - (1,000+800) = 800 units

	Calculations	$
Ending inventory	800 units × $ 65.05	$ 52,040
Cost of goods sold	(1,000 units × $ 62)+(800 units × $ 65.05)	$ 114,040