Assuming a perpertual inventory system and using the weighted average method, de
ID: 2458566 • Letter: A
Question
Assuming a perpertual inventory system and using the weighted average method, determine (a) the weighted average unit cost after the May 23rd purchase (b) the cost of the merchandice sold on May 26, and (c) Using a LIFO perpetual cost flow, calculate the value of the ending inventory and the cost of merchandise sold for the month of Novemeber of Beamer Company using the data below
Nov. 1 Purchased 600 units $80 each
4 Sold 200 units
11 Purchased 350 units $82 each
12 Sold 275 units
22 Purchased 175 units $84 each
23 Sold 155 units
Calculate the following : (a) Inventory valuation at the end of November (b) Calculate the cost of merchandise sold for November
Explanation / Answer
A) Perpetual system FIFO cost flow
Date
Transaction
Quantity
Price/cost
Purchase
Sale
Closing
11/1
Purchase
600
80
600*80
600*80
11/4
Sale
200
80
200*80
400*80
11/11
Purchase
350
82
350*82
400*80
350*82
11/12
Sale
275
82
275*82
400*80
75*82
11/22
Purchase
175
84
175*84
400*80
75*82
175*84
11/23
SALE
155
84
155*84
400*80
75*82
20*84
Cost of goods sold under perpetual system = [(200*80 + 275*82 + 155*84) = 51570
b) cost of Closing stock as per LIFO = 400*80 + 75 *82 + 20*84
= 39830
Date
Transaction
Quantity
Price/cost
Purchase
Sale
Closing
11/1
Purchase
600
80
600*80
600*80
11/4
Sale
200
80
200*80
400*80
11/11
Purchase
350
82
350*82
400*80
350*82
11/12
Sale
275
82
275*82
400*80
75*82
11/22
Purchase
175
84
175*84
400*80
75*82
175*84
11/23
SALE
155
84
155*84
400*80
75*82
20*84
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