Assume that we use a perpetual inventory system and that five identical units are purchased at the following four dates and costs:- April 5: $10- April 10: $12- April 15: $14- April 20: $16- April 22: $17One unit is sold on April 25. The company uses the weighted average inventory costing method.Identify the cost of the ending inventory on the balance sheet. (Round your answer to 2 decimal places.)**Cost of the ending inventory:** [Input Box]

Answered: April 5 April 10 April 15 April 20…

April 5 April 10 April 15 April 20 April 22 ne unit is sold on April 25. The c entify the cost of the ending inve $ 10 $ 12 $ 14 $ 16 $ 17

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

Assume that we use a perpetual inventory system and that five identical units are purchased at the following four dates and costs:

- April 5: $10
- April 10: $12
- April 15: $14
- April 20: $16
- April 22: $17

One unit is sold on April 25. The company uses the weighted average inventory costing method.

Identify the cost of the ending inventory on the balance sheet. (Round your answer to 2 decimal places.)

**Cost of the ending inventory:** [Input Box]

Expert Solution

Step 1

Answer :

Ending inventory = Total number of unit purchase - Unit sold

Ending inventory = 5 - 1 = 4

Weighted average cost = ($10 + $12 + $14 + $16 + $17)/5

Weighted average cost = $13.8

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