Calculate the cost of goods sold for May and the ending inventory at May 31 using the average cost formula.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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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