15. Invemory recoeds for Doord Namber of Uaits Uit Cast Taal Cast SIR0 $7. 200o

Question

15. Invemory recoeds for Doord Namber of Uaits Uit Cast Taal Cast SIR0 $7. 200o Apr. 20 22.50 S11250.00 weighted-aver wM700umis ofiventary dring the month Ending inve-y- be fround wighted-average unit coost to four decimals and final answer to the nearest whole dol A 54 500 B. $3,600 C $4.100 D. S4,050 16. Under the principle of lower of cost and net realizable value of inventory, when a compar inventory A with net realizable value of S50 and a cost of $60, what is the adjustment? L Debi Cost of Goods Sold $500; credit Inventory $500. LDebit Cost of Goods Soild $100 credit Inventory S100. Debit Inventory $100, credit Cost of Goods Sold $100. Debit Inventory $500, credit Cost of Goods Sold $500.

Explanation / Answer

Answer to 15 is C

Weighted Average Cost = Total Cost / Total Units

= (7200 + 11250) / (400+500)

= 18450 / 900

=$20.50 Per Unit

Closing Stock Value = No of Units x Weighted Average cost per unit

= 200 x 20.5

= $4100

Answer to 16 is B

If net realisable value is less than cost than difference is charged to cost of goods sold therefore entry mentioned in B is correct.

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