Question

Required information

Problem 5-1A Perpetual: Alternative cost flows LO P1

[The following information applies to the questions displayed below.]

Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.

Date

Activities

Units Acquired at Cost

Units Sold at Retail

Mar.

1

Beginning inventory

130

units

@ $51.60 per unit

Mar.

5

Purchase

240

units

@ $56.60 per unit

Mar.

9

Sales

290

units

@ $86.60 per unit

Mar.

18

Purchase

100

units

@ $61.60 per unit

Mar.

25

Purchase

180

units

@ $63.60 per unit

Mar.

29

Sales

160

units

@ $96.60 per unit

Totals

650

units

450

units

Problem 5-1A Part 3

3. Compute the cost assigned to ending inventory using weighted average and specific identification. For specific identification, the March 9 sale consisted of 80 units from beginning inventory and 210 units from the March 5 purchase; the March 29 sale consisted of 60 units from the March 18 purchase and 100 units from the March 25 purchase.

I need weghted average and Specific ID.

Answer 1

	Solution
Date	Transacton	Unit	Price	Cost
Mar-01	Opening Inventory	130	$ 51.60	$ 6,708
Mar-05	Purchase	240	$56.60	$ 13,584
Mar-18	purchase	100	$ 61.60	$ 61,600
Mar-25	Purchase	180	$ 63.60	$ 11,448
	Total	650		$ 37,900
	Weighted average cost per unit = Total cost / Total unit
	= $ 37,900 / 650 unit =	$ 58.3077
	Valuation of inventory at closing = Closing unit x weighted average cost per unit
	= 200 unit x $ 58.3077
	= $ 11661.54
	Note Closing Inventory = (Opening inventory + purchase) - sale unit
	= 650 unit - 290 unit - 160 unit = 200 unit