Question

Tama Inc. uses a perpetual inventory system and had the following activity for a single inventory item:

   Units    Unit Cost Total Cost

       May 1, inventory                 140       $2.50                                $350

       Purchases:

              May 5                          200       3.50                                    700

              May 10                        140       4.50                                    630

              May 15                        160       5.50                                    880

       Sales:

              May 11                        250

              May 19                        150

Using the perpetual system, determine the ending inventory and cost of goods sold under weighted-average method (round unit cost to nearest cent)

Answer 1

	Puchases			Sales			Balance
Date	Units	Per unit	Total	Units	Per unit	Total	Units	Per unit	Total
1-May	140	2.5	350				140	2.5	350
Total							140	2.5	350
Opening							140	2.5	350
5-May	200	3.5	700				200	3.5	700
10-May	140	4.5	630				140	4.5	630
TotaL							480	3.5	1680	note 1
Opening							480	3.5	1680
11-May				250	3.5	875	-250	3.5	-875
15-May	160	5.5	880				160	5.5	880
TotaL							390	4.32	1685	note 2
Opening							390	4.32	1685
19-May				150	4.32	648.08	-150	4.32	(648.08)
Total						1523.077	240	4.32	1036.923
Note
1. Weighted average cost = Total cost/total units
	=	1680/480
	=	3.5
2. Weighted average cost = Total cost/total units
	=	1685/390
	=	4.32
Cost of goods sold is 1523.077
Closing inventory = 240 units at total cost of 1036.92