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Exercise 6-4A Calculate inventory amounts when costs are rising (LO6-3)

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During the year, TRC Corporation has the following inventory transactions.

Date		Transaction	Number of Units			Unit Cost			Total Cost
Jan.	1	Beginning inventory		52		$	44			$	2,288
Apr.	7	Purchase		132			46				6,072
Jul.	16	Purchase		202			49				9,898
Oct.	6	Purchase		112			50				5,600
				498						$	23,858

For the entire year, the company sells 432 units of inventory for $62 each.

Exercise 6-4A Part 3

3. Using weighted-average cost, calculate ending inventory, cost of goods sold, sales revenue, and gross profit. (Round "Average Cost per unit" to 4 decimal places and all other answers to the nearest whole number.)

Answer 1

Hi There,

Here is my answer to the given question.

WEIGHTED AVERAGE COST METHOD:

Date	Receipts	Issues	Balance of Stock
	Qty	Rate ($)	Amount ($)	Qty	Rate ($)	Amount ($)	Qty	Rate ($)	Amount ($)
Jan-01							52.00	44.00	2,288.00
Apr-07	132.00	46.00	6,072.00				184.00	45.43	8,360.00
Jul-16	202.00	49.00	9,898.00				386.00	47.30	18,258.00
Oct-06	112.00	50.00	5,600.00				498.00	47.90	23,858.00
Mar-31				432.00	62.00	26,784.00	66.00	47.90	3,161.90

The Average cost per unit = Total Cost of Production / No of units

= 23858/498

= $ 47.9076

Cost of goods sold = OPening stock + Purchases - Closing stock

= 2288 + 6072 + 9898 + 5600 - 3161.90

= $ 20697

Sales Revenue = Sales Per unit * No of units sold

= 432*62

= $ 26784

Gross Profit = Sales -COGS

= 26784 - 20697.10

= $ 6087

Hope you satisfied with my answer, Thanks...! Have a nice day..!!