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	30,000	units at $30.00
Mar. 18	Sale	24,000	units
May 2	Purchase	54,000	units at $31.00
Aug. 9	Sale	45,000	units
Oct. 20	Purchase	21,000	units at $32.10

The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of merchandise 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.

Answer 1

STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL WEIGHTED AVERAGE METHOD
	RECIEPTS	COST OF GOODS SOLD	BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
01-Jan							30000	30	900000
18-Mar				24000	30	720000	6000	30	180000
02-May	54000	31	1674000				6000	30	180000
							54000	31	1674000
Average							60000	30.9	1854000
09-Aug				45000	30.9	1390500	15000	30.9	463500
20-Oct	21000	32.1	674100				15000	30.9	463500
							21000	32.1	674100
AVERAGE							36000	31.6	1137600
TOTAL	75000		2348100	69000		2110500	36000	31.6	1137600
	Cost of goods sold		21,10,500
	Cost of Ending inventory	11,37,600