Question

Create the journal entries and maintain the Inventory T-Acct based on the
following transactions using the perpetual weighted average
inventory method

9.1	5-Jan-09	bought on credit 10,000 barrels of crude oil for $600,000
	15-Jan-09	bought for cash 8,200 barrels of crude oil for $451,000
	30-Mar-09	bought on credit 11,200 barrels of crude oil for $694,400
	2-May-09	bought on credit 9,400 barrels of crude oil for $479,400
	13-Jul-09	sold for cash 30,000 barrels of crude oil for $2,700,000

(check figure: perpetual weighted average inventory balance = 504,594)

9.2

Amiras Corporation began operations on January 1, 2014, with a beginning inventory of $30,100.00 at cost and $50,000.00 at retail.

The following information relates to 2014:

Net purchases		Cost: $108,500.00; Retail: $150,000.00
Net markups		$   10,000.00
Net markdowns		$     5,000.00
Sales		$ 126,900.00

Compute the ending inventory using the LIFO Retail Method

(check figure: ending balance = $49,770.00)

Compute the ending inventory using Dollar-Value LIFO Retail Method
Price Index is 1.10

(check figure: ending balance = $46,270.00)

9.3	An area of trees were cut and sold to a lumber saw mill for $350,000.00
	Three grades of lumber were able to be identified from the trees that were cut:
	320,000 feet of Grade A lumber appraised at $140,000.00
	492,000 feet of Grade B lumber appraised at $157,440.00
	554,000 feet of Grade C lumber appraised at $105,260.00

What will be the general journal to record this purchase and what is the price per foot
paid for each grade of lumber?

(check figure: total price paid for Grade C lumber = 91,484.98)

Answer 1

Dear student, we cannot able to post solution more than one question as per our policy.

Purchase Price per barrels of crude oil
Date	Purchase Value	Divided by: Qty in barrels	Cost per barrel
Jan 5	600,000	10,000	$        60.00
Jan 15	451,000	8,200	$        55.00
Mar 30	694,400	11,200	$        62.00
May 2	479,400	9,400	$        51.00

Weighted average Method						Perpetual Inventory System
Date	Purchase			Cost of goods sold			Inventory on Hand
	Qty	Price	Value	Qty	Price	Value	Qty	Price	Value
Jan 5	10,000	60	600,000				10,000	60	600,000
Jan 15	8,200	55	451,000				18,200		1,051,000
Weighted Average Cost (1051000/18200)								57.74725
Mar 30	11,200	62	694,400				29,400		1,745,400
Weighted Average Cost (1745400/29400)								59.36735
May 2	9,400	51	479,400				38,800		2,224,800
Weighted Average Cost (2224800/38800)								57.34021
Jul 13				30,000	57.34021	1,720,206	8,800	57.34021	504,594
Inventory balance using perpetual weighted average method									$        504,594

Company Name
Date	General Journal	Debit	Credit
Jan 5	Inventory	600,000
	Account payable		600,000
	(To record purchase of inventory on Account.)
Jan 15	Inventory	451,000
	Cash		451,000
	(To record purchase of inventory on Cash.)
Mar 30	Inventory	694,400
	Account payable		694,400
	(To record purchase of inventory on Account.)
May 2	Inventory	479,400
	Account payable		479,400
	(To record purchase of inventory on Account.)
Jul 13	Cash	2,700,000
	Sales revenue		2,700,000
	(To record sales revenue on cash.)
Jul 13	Cost of goods sold	1,720,206
	Inventory		1,720,206
	(To record cost of goods sold.)

Inventory Account
Date	Debit	Credit	Date
Jan 5	600,000	1,720,206	Jul 13
Jan 15	451,000
Mar 30	694,400
May 2	479,400
End. Bal	504,594