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Weighted Average Cost Method with Perpetual Inventory The beginning inventory at Midnight Supplies and data on...

  1. Weighted Average Cost Method with Perpetual Inventory

    The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period ending March 31, are as follows:

    Date Transaction Number
    of Units
    Per Unit Total
    Jan. 1 Inventory 7,500 $75.00 $562,500
    10 Purchase 22,500 85.00 1,912,500
    28 Sale 11,250 150.00 1,687,500
    30 Sale 3,750 150.00 562,500
    Feb. 5 Sale 1,500 150.00 225,000
    10 Purchase 54,000 87.50 4,725,000
    16 Sale 27,000 160.00 4,320,000
    28 Sale 25,500 160.00 4,080,000
    Mar. 5 Purchase 45,000 89.50 4,027,500
    14 Sale 30,000 160.00 4,800,000
    25 Purchase 7,500 90.00 675,000
    30 Sale 26,250 160.00 4,200,000

    Required:

    1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 5, using the weighted average cost method. Round unit cost to two decimal places, if necessary.

    Midnight Supplies
    Schedule of Cost of Merchandise Sold
    Weighted Average Cost Method
    For the three months ended March 31
    Purchases Cost of Merchandise Sold Inventory
    Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost
    Jan. 1 $ $
    Jan. 10 $ $
    Jan. 28 $ $
    Jan. 30
    Feb. 5
    Feb. 10
    Feb. 16
    Feb. 28
    Mar. 5
    Mar. 14
    Mar. 25
    Mar. 30
    Mar. 31 Balances $ $

    2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period.

    Total sales $
    Total cost of merchandise sold $
    Gross profit from sales $

    3. Determine the ending inventory cost as of March 31.
    $

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Solutions

Expert Solution

Answer 1
Midnight Supplies
Schedule of Cost of Merchandise Sold
Weighted Average Cost Method
For the three months ended March 31
Purchases Cost of Merchandise Sold Inventory
Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost
Jan. 1 $                     -   $                -      7,500.00 $ 75.00 $   562,500.00
Jan. 10           22,500.00 $ 85.00 $     1,912,500.00 $                -   30,000.00 $ 82.50 $2,475,000.00
Jan. 28 $                     -                11,250.00 $              82.50 $   928,125.00 18,750.00 $ 82.50 $1,546,875.00
Jan. 30 $                     -                 3,750.00 $              82.50 $   309,375.00 15,000.00 $ 82.50 $1,237,500.00
Feb. 5 $                     -                 1,500.00 $              82.50 $   123,750.00 13,500.00 $ 82.50 $1,113,750.00
Feb. 10           54,000.00 $ 87.50 $     4,725,000.00 $                -   67,500.00 $ 86.50 $5,838,750.00
Feb. 16 $                     -                27,000.00 $              86.50 $2,335,500.00 40,500.00 $ 86.50 $3,503,250.00
Feb. 28 $                     -                25,500.00 $              86.50 $2,205,750.00 15,000.00 $ 86.50 $1,297,500.00
Mar. 5           45,000.00 $ 89.50 $     4,027,500.00 $                -   60,000.00 $ 88.75 $5,325,000.00
Mar. 14 $                     -                30,000.00 $              88.75 $2,662,500.00 30,000.00 $ 88.75 $2,662,500.00
Mar. 25             7,500.00 $ 90.00 $        675,000.00 $                -   37,500.00 $ 89.00 $3,337,500.00
Mar. 30 $                     -                26,250.00 $              89.00 $2,336,250.00 11,250.00 $ 89.00 $1,001,250.00
Mar. 31 Balances 11,250.00 $ 89.00 $1,001,250.00
Answer 2
Total sales $ 19,875,000.00
Total cost of merchandise sold $ 10,901,250.00
Gross profit from sales $   8,973,750.00
Working for answer 2
Quantity Unit Sale Price Total Sales Value Cost of Merchandise Sold Gross Profit
Jan. 28           11,250.00 $ 150.00 $     1,687,500.00 $        928,125.00 $      759,375.00
Jan. 30             3,750.00 $ 150.00 $        562,500.00 $        309,375.00 $      253,125.00
Feb. 5             1,500.00 $ 150.00 $        225,000.00 $        123,750.00 $      101,250.00
Feb. 16           27,000.00 $ 160.00 $     4,320,000.00 $     2,335,500.00 $   1,984,500.00
Feb. 28           25,500.00 $ 160.00 $     4,080,000.00 $     2,205,750.00 $   1,874,250.00
Mar. 14           30,000.00 $ 160.00 $     4,800,000.00 $     2,662,500.00 $   2,137,500.00
Mar. 30           26,250.00 $ 160.00 $     4,200,000.00 $     2,336,250.00 $   1,863,750.00
Total $    19,875,000.00 $    10,901,250.00 $   8,973,750.00
Answer 3
Determine the ending inventory cost as of March 31.
Value Quantity
$        1,001,250.00 11,250.00

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