Question

Weighted Average Cost Flow Method Under Perpetual Inventory System

The following units of a particular item were available for sale during the calendar year:

Jan. 1	Inventory	10,000	units at $75.00
Mar. 18	Sale	8,000	units
May 2	Purchase	18,000	units at $77.50
Aug. 9	Sale	15,000	units
Oct. 20	Purchase	7,000	units at $80.25

The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale. Present the data in the form illustrated in Exhibit 5. Round unit cost to two decimal places, if necessary.

Schedule of Cost of Goods Sold Weighted Average Cost Flow Method
	Purchases			Cost of Goods Sold			Inventory
Date	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
Jan. 1
Mar. 18
May 2
Aug. 9
Oct. 20
Dec. 31	Balances

Answer 1

Schedule of Cost of Goods Sold Weighted Average Cost Flow Method
	purchase			cost of goods sold			balanced inventory
date	unit	Unit cost	total	unit	Unit cost	total	unit	Units cost	total
01-Jan	10,000	75	7,50,000	-	-	-	10,000	75	7,50,000
18-Mar	-	-		8,000	75	6,00,000	2,000	75	1,50,000
02-May	18,000	77.50	13,95,000	-	-	-	2,000	75	1,50,000
							18,000	77.50	13,95,000
09-Aug	-	-	-	15,000	77.25	11,58,750	5,000	77.25	3,86,250
20-Oct	7,000	80.25	5,61,750	-	-	-	5,000	77.25	3,86,250
							7,000	80.25	5,61,750
	35,000		27,06,750	23,000		17,58,750	12,000		9,48,000