Question

The Stilton Company has the following inventory and credit purchases during the fiscal year ended December 31, 2020.

Beginning		521 units @ $88/unit
Feb. 10		265 units @ $85/unit
Aug. 21		145 units @ $98/unit

Stilton Company has two credit sales during the period. The units have a selling price of $148 per unit.

Sales
Mar.	15	345 units
Sept.	10	250 units

Stilton Company uses a perpetual inventory system.

Required:
1. Calculate the dollar value of cost of goods sold and ending inventory using: (Do not round intermediate calculations. Round "Average cost per unit" to 2 decimal places. Round the final answers to 2 decimal places.)

Answer 1

Using Weighted Average Cost Method

	Goods		Purchased	Cost of	Goods	Sold	Ending	Inventory	Balance
Particulars / Date	Units	Unit Rate	Total	Units	Unit Rate	Total	Units	Unit Rate	Total
Beginning Inventory / Jan 01							521	88	45,848
Purchases / Feb 10	265	85	22,525				521	88	45,848
							265	85	22,525
Average Cost							786	86.99	68,373
Sales / March 15				345	86.99	30,011.04	441	86.99	38,361.96
Purchases / August 21	145	98	14,210				441	86.99	38,361.96
							145	98	14,210
Average Cost							586	89.71	52,571.96
Sales / September 10				250	89.71	22,428.27	336	89.71	30,143.69
Total Purchases	410		36,735
Cost of Goods Sold for the Year				595		52,439.31
Ending Inventory as in December 31							336	89.71	30,143.69

Value of Cost of Goods Sold = 250 Units * $ 89.71 per Unit + 345 Units * $ 86.99 Per Unit = $ 52,439.31

Value of Ending Inventory = 336 Units * $ 89.71 per Unit = $ 30,143.69

Notes:-

Weighted Average Cost per Unit on Feb 10 = 68,373 / 786 Units = $ 86.99 Per Unit

Weighted Average Cost per Unit on August 31 = 52,571.86 / 586 Units = $ 89.71 per Unit