Question

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

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

In weighted average cost method using perpetual inventory system, the weighted average cost is calculated by dividing the total cost by total no. of units after every purchase and sale transaction.


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