Question

In: Accounting

Calculating Weighted-Average Cost Inventory Values The Brattle Corporation began operations in 2018. Information relating to the...

Calculating Weighted-Average Cost Inventory Values The Brattle Corporation began operations in 2018. Information relating to the company’s purchases of inventory and sales of products for 2018 and 2019 is presented below.

2018

March 1 Purchase 220 units @ $12 per unit

June 1 Sold 120 units @ $25 per unit

September 1 Purchase 100 units @ $15 per unit

November 1 Sold 130 units @ $25 per unit

2019

March 1 Purchase 70 units @ $16 per unit

June 1 Sold 80 units @ $30 per unit

September 1 Purchase 100 units @ $18 per unit

November 1 Sold 90 units @ $35 per unit

Calculate the weighted-average cost of goods sold and ending inventory for 2018 and 2019 assuming use of (a) the periodic method and (b) the perpetual method.

a. Weighted-Average Periodic. Do not round your cost per unit. Do not round until your final answer. Round your answers to the nearest whole number.

2018

Cost of goods sold ___3,234_______

Ending inventory _____906_____

2019

Cost of goods sold ____3,195______

Ending inventory ______945____

b. Weighted-Average Perpetual. Do not round your cost per unit. Do not round until your final answer. Round your answers to the nearest whole number.

2018

Cost of goods sold _____3,195_____

Ending inventory _____945_____

2019

Cost of goods sold __________?

Ending inventory __________?

Solutions

Expert Solution

Weighted average cost = Cost of goods available for sale ÷ Number of units available for sale

Perpetual Method

Description 2018 2019
Units Cost Total    Units Cost Total
Opening Inventory - - - 70 13.5 945
Purchased on March 1 220 12 2640 70 16 1120
Sold on June 1 120 12 1440 80 14.75 1180
Purchased on September 1 100 15 1500 100 18 1800
Sold on November 1 130 13.5 1755 90 16.78125 1510.3125
Ending Inventory 70 13.5 945 70 16.78125 1174.6875
Total cost of goods sold 250 3195 170 2690.3125

Cost of goods sold in 2018 = $ 3195

Cost of goods sold in 2019 = $ 2690

Ending inventory in 2018 = $ 945

Ending inventory in 2019 = $ 1175

In perpetual method, weighted average cost is calculated everytime when there is a sale.

Periodic Method

Description 2018 2019
Units Cost Total    Units Cost Total
Opening Inventory - - - 70 12.9375 905.625
Purchased on March 1 220 12 2640 70 16 1120
Purchased on September 1 100 15 1500 100 18 1800
Sold on June 1 120 12.9375 1552.5 80 15.94 1275.20833
Sold on November 1 130 12.9375 1681.875 90 15.94 1434.60937
Ending Inventory 70 12.9375 905.625 70 15.94 1115.80729
Total cost of goods sold 250 3234.375 170 2709.8177

Cost of goods sold in 2018 = $ 3234

Cost of goods sold in 2019 = $ 2710

Ending inventory in 2018 = $ 906

Ending inventory in 2019 = $ 1116

In periodic method, weighted average cost is calculated on the entire class of inventory.

ekkarill92 answered 1 month ago
Next > < Previous

Related Solutions

Calculating Weighted-Average Cost Inventory Values The Brattle Corporation began operations in 2018. Information relating to the...
Calculating Weighted-Average Cost Inventory Values The Brattle Corporation began operations in 2018. Information relating to the company’s purchases of inventory and sales of products for 2018 and 2019 is presented below. 2018 March 1 Purchase 220 units @ $12 per unit June 1 Sold 120 units @ $25 per unit September 1 Purchase 100 units @ $15 per unit November 1 Sold 130 units @ $25 per unit 2019 March 1 Purchase 70 units @ $16 per unit June 1...
Calculating Weighted-Average Cost Inventory Values The Brattle Corporation began operations in 2018. Information relating to the...
Calculating Weighted-Average Cost Inventory Values The Brattle Corporation began operations in 2018. Information relating to the company’s purchases of inventory and sales of products for 2018 and 2019 is presented below. 2018 March 1 Purchase 220 units @ $12 per unit June 1 Sold 120 units @ $25 per unit September 1 Purchase 100 units @ $15 per unit November 1 Sold 130 units @ $25 per unit 2019 March 1 Purchase 70 units @ $16 per unit June 1...
Calculating Weighted-Average Cost Inventory Values The Mann Corporation began operations in 2015. Information relating to the...
Calculating Weighted-Average Cost Inventory Values The Mann Corporation began operations in 2015. Information relating to the company’s purchases of inventory and sales of products for 2015 and 2016 is presented below 2015 March 1 Purchase 200 units @ $10 per unit June 1 Sold 120 units @ $25 per unit September 1 Purchase 100 units @ $14 per unit November 1 Sold 130 units @ $25 per unit 2016 March 1 Purchase 100 units @ $16 per unit June 1...
Calculating Weighted-Average Cost Inventory Values The Mann Corporation began operations in 2015. Information relating to the...
Calculating Weighted-Average Cost Inventory Values The Mann Corporation began operations in 2015. Information relating to the company’s purchases of inventory and sales of products for 2015 and 2016 is presented below 2015 March 1 Purchase 200 units @ $10 per unit June 1 Sold 120 units @ $25 per unit September 1 Purchase 100 units @ $14 per unit November 1 Sold 130 units @ $25 per unit 2016 March 1 Purchase 100 units @ $16 per unit June 1...
Calculating LIFO Inventory Values The Mann Corporation began operations in 2015. Information relating to the company’s...
Calculating LIFO Inventory Values The Mann Corporation began operations in 2015. Information relating to the company’s purchases of inventory and sales of products for 2015 and 2016 is presented below. 2015 February 1 Purchase 200 units @ $10 per unit May 1 Sold 120 units @ $25 per unit August 1 Purchase 100 units @ $14 per unit October 1 Sold 130 units @ $25 per unit 2016 February 1 Purchase 100 units @ $16 per unit May 1 Sold...
Calculating FIFO Inventory Values The Mann Corporation began operations in 2015. Information relating to the company’s...
Calculating FIFO Inventory Values The Mann Corporation began operations in 2015. Information relating to the company’s purchases of inventory and sales of products for 2015 and 2016 is presented below. 2015 January 1 Purchase 200 units @ $10 per unit April 1 Sold 120 units @ $25 per unit July 1 Purchase 100 units @ $14 per unit September 1 Sold 130 units @ $25 per unit 2016 January 1 Purchase 100 units @ $16 per unit April 1 Sold...
The Mann Corporation began operations in 2011. Information relating to the company's purchases of inventory and...
The Mann Corporation began operations in 2011. Information relating to the company's purchases of inventory and sales of products for 2011 and 2012 is presented below. 2011 February 1 Purchase 200 units @ $20 per unit May 1 Sold 120 units @ $50 per unit August 1 Purchase 100 units @ $28 per unit October 1 Sold 130 units @ $50 per unit 2012 February 1 Purchase 100 units @ $32 per unit May 1 Sold 80 units @ $60...
(Calculating FIFO, Weighted Average Cost—Periodic) The following information is for the inventory of mini-kettles at Funnell...
(Calculating FIFO, Weighted Average Cost—Periodic) The following information is for the inventory of mini-kettles at Funnell Company Limited for the month of May: Date Transaction Units In Unit Cost Total Units Sold Unit Price Total May  1 Balance   100 $4.10 $  410 6 Purchase 800  4.20  3,360 7 Sale   300 $7.00 $ 2,100 10 Sale   300  7.30 2,190 12 Purchase   400  4.50  1,800 15 Sale   200  7.40 1,480 18 Purchase   300  4.60  1,380 22 Sale   400  7.40 2,960 25 Purchase   ...
Nash Company began operations on January 1, 2018, and uses the average-cost method of pricing inventory....
Nash Company began operations on January 1, 2018, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2021. The following information is available for the years 2018–2020. Net Income Computed Using Average-Cost Method FIFO Method LIFO Method 2018 $15,980 $19,140 $12,070 2019 18,090 21,090 14,040 2020 20,130 24,990 16,940 (a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2021. Account Titles...
Tony Corporation began operations on January 1, 2018. The following transactions relating to stockholders’ equity occurred...
Tony Corporation began operations on January 1, 2018. The following transactions relating to stockholders’ equity occurred in the first two years of the company’s operations. 2018 Jan. 1 Authorized the issuance of 2 million shares of $5 par value common stock and 100,000 shares of $100 par value, 10% cumulative, preferred stock. Jan. 2 Issued 200,000 shares of common stock for $12 cash per share. Jan. 3 Issued 100,000 shares of common stock in exchange for a building valued at...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT