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	4,000 units at $20
Apr. 19	Sale	2,500 units
June 30	Purchase	6,000 units at $24
Sept. 2	Sale	4,500 units
Nov. 15	Purchase	1,000 units at $25

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							4000	20	80000
19-Apr				2500	20	50000	1500	20	30000
30-Jun	6000	24	144000				1500	20	30000
							6000	24	144000
Average							7500	23.2	174000
02-Sep				4500	23.2	104400	3000	23.2	69600
15-Nov	1000	25	25000				3000	23.2	69600
							1000	25	25000
AVERAGE							4000	23.65	94600
TOTAL	7000		169000	7000		154400	4000	23.65	94600
	Cost of goods sold		1,54,400
	Cost of Ending inventory	94,600