Calculate the cost of goods sold for May and the ending inventory at May 31 using the average cost formula.
Calculate the cost of goods sold for May and the ending inventory at May 31 using the average cost formula.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
a. Novak Inc. uses a perpetual inventory system. Its records show the following for the month of May.
Date | Explanation | Units | Unit Cost |
Total Cost |
||||||||
May | 1 | Inventory | 27 | $ 7 | $ 189 | |||||||
May | 15 | Purchase | 26 | 8 | 208 | |||||||
May | 18 | Sale | ( 46 | ) | ||||||||
May | 24 | Purchase | 40 | 9 | 360 | |||||||
Total | 47 | $ 757 |
Calculate the cost of goods sold for May and the ending inventory at May 31 using the average cost formula. (For average, use 3 decimal places, e.g. 15.235 in your calculations and round final answers to 2 decimal places, e.g 5.25.)
Cost of goods sold | $ | |
Ending Inventory | $ |
b. Ayayai Inc. uses a periodic inventory system. Its records show the following for the month of May, in which 79 units were sold.
Date | Explanation | Units | Unit Cost |
Total Cost | ||||||||
May 1 | Inventory | 31 | $ 10 | $ 310 | ||||||||
May 15 | Purchase | 26 | 11 | 286 | ||||||||
May 24 | Purchase | 42 | 12 | 504 | ||||||||
Total
|
99 | $ 1,100 |
|
Calculate the Cost of goods sold and the ending inventory at May 31 using the average cost formula. (Round average cost to 3 decimal places, e.g. 5.252 and round final answer to 2 decimal places, e.g 5.25.)
Cost of goods sold | $ | ||
Ending inventory | $ |
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