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 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								$	$
Apr. 19					$	$
June 30		$	$
Sept. 2
Nov. 15
Dec. 31	Balances					$		$	$

Answer 1

Solution:

Schedule of cost of goods sold Weighted Average cost flow method
Date	Purchases			Cost of Goods sold			Inventory
	Qty	Unit cost	Total Cost	Qty	Unit cost	Total Cost	Qty	Unit cost	Total Cost
01-Jan	0	$0.00	$0	0	$0.00	$0	4000	$20.00	$80,000
19-Apr	0	$0.00	$0	2500	$20.00	$50,000	1500	$20.00	$30,000
30-Jun	6000	$24.00	$1,44,000	0	$0.00	$0	7500	$23.20	$1,74,000
02-Sep	0	$0.00	$0	4500	$23.20	$1,04,400	3000	$23.20	$69,600
15-Nov	1000	$25.00	$25,000	0	$0.00	$0	4000	$23.65	$94,600
Dec-31	Balances			7000		$1,54,400	4000	23.65	$94,600