Question

Shown below is activity for one of the products of Denver Office Equipment:

January 1 balance, 630 units @ $55 $34,650
Purchases:
January 10:	630 units @ $60
January 20:	1,260 units @ $62
Sales:
January 12:	900 units
January 28:	770 units

Required:

Compute the January 31 ending inventory and cost of goods sold for January, assuming Denver uses average cost and a perpetual inventory system.

Ending Inventory ?

Cost of Good Sold?

Answer 1

Ending Inventory
Date	Particulars	Units	Ending Balance as Per Inventory Perpetual System
1-Jan	Beginning Inventory	630	630
10-Jan	Purchase	630	1260
12-Jan	Sale	-900	360
20-Jan	Purchase	1260	1620
28-Jan	Sale	-770	850
Ending Inventory		850
*
Cost of Goods Sold
Date	Particulars	Units	Cost Per Unit	Amount in $
12-Jan	Sale (W. Note-1)	900	57.5	51750
28-Jan	Sale (W. Note-2)	770	61	46970
				98720
W. Note -1
Date	Particulars	Units	Cost Per unit	Total cost
1-Jan	Beginning Inventory	630	55	34650
10-Jan	Purchase	630	60	37800
	Total	1260		72450
	Average Cost Per unit			57.5
	(72450/1260)
W. Note -2
Remaining Ending Units	360
Date	Particulars	Units	Cost Per unit	Total cost
10-Jan	Remaining Inventory	360	57.5	20700
10-Jan	Purchase	1260	62	78120
	Total	1620		98820
	Average Cost Per unit			61
	(98820/1620)