Jan. 1 Inventory 1,000 units at $150
Mar. 18 Sale 800 units
May 2 Purchase 1,800 units at $155
Aug. 9 Sale 1,500 units
Oct. 20 Purchase 700 units at $160.50
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.
Answer:
Date
Purchases Cost of Merchandise Sold Inventory
Quantity
Unit
Cost
Total
Cost Quantity
Unit
Cost
Total
Cost Quantity Unit Cost
Total
Cost
Jan. 1 1,000 150.00 150,000
Mar. 18 800 150.00 120,000 200 150.00 30,000
May 2 1,800 155.00 279,000 2,000 154.50 309,000
Aug. 9 1,500 154.50 231,750 500 154.50 77,250
Oct. 20 700 160.50 112,350 1,200 158.00 189,600
Dec. 31 Balances 351,750 1,200 158.00 189,600