Question

In its first month of operations, Literacy for the Illiterate opened a new bookstore and bought merchandise in the following order: (1) 400 units at $6 on January 1, (2) 600 units at $8 on January 8, and (3) 870 units at $9 on January 29. Assuming 1,070 units are on hand at the end of the month.

Calculate the cost of goods available for sale, cost of goods sold, and ending inventory under the weighted average cost flow assumptions. Assume perpetual inventory system and sold 800 units between January 9 and January 28. (Round your intermediate calculations to 2 decimal places.)

my answers so far:
CoGAFS= 15030

COGS= 6,432

EI= 8603

My assignment is telling me that my cost of goods available for sale is correct. But my cost of goods sold is wrong and my ending inventory calculations are wrong.

Any help with this assignment will be greatly appreciated.

Answer 1

cost of goods available for sale on January 9 = 400 x 6 + 600 x 8

= 2,400 + 4,800

= $7,200

weighted average cost per unit on January 9 = cost of goods available for sale on January 9/Number of units available for sale on January 9

= 7,200/1,000

= $7.2

800 units were sold between January 9 and January 28.

Cost of goods sold = Number of units sold x weighted average cost per unit

= 800 x 7.2

= $5,760

Value of inventory remaining after sale of 800 units = cost of goods available for sale on January 9 - Cost of goods sold

= 7,200 - 5,760

= $1,440

Value of inventory purchased on January 29 = 870 x 9

= $7,830

Ending inventory = Value of inventory remaining after sale of 800 units + Value of inventory purchased on January 29

= 1,440 + 7,830

= $9,270

Cost of goods sold	5760
Ending inventory	9270

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