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chases al Cost 2,000 ✓ 0,000 ✓ Weighted Average Cost Flow Method Cost of Goods Sold Quantity 7,000 ✓ 8,000 ✓ Cost of Goods Sold Unit Cost 50 ✓ 55.20 Cost of Goods Sold Total Cost 350,000 ✓ 441,600 ✓ 791,600 ✓ Inventory Quantity 9,000 ✓ 2,000 ✓ 10,000 ✓ 2,000 ✓ 4,000 X 6,000 ✓ Inventory Unit Cost 50 ✓ 50 ✓ 55.20 ✔ 55.20 ✔ 58.40 ✔ Inventory Total Cost 450,000 ✓ 100,000 552,000 ✓ 110,400 ✓ 240,000 X 350,400 ✓

chases al Cost 2,000 ✓ 0,000 ✓ Weighted Average Cost Flow Method Cost of Goods Sold Quantity 7,000 ✓ 8,000 ✓ Cost of Goods Sold Unit Cost 50 ✓ 55.20 Cost of Goods Sold Total Cost 350,000 ✓ 441,600 ✓ 791,600 ✓ Inventory Quantity 9,000 ✓ 2,000 ✓ 10,000 ✓ 2,000 ✓ 4,000 X 6,000 ✓ Inventory Unit Cost 50 ✓ 50 ✓ 55.20 ✔ 55.20 ✔ 58.40 ✔ Inventory Total Cost 450,000 ✓ 100,000 552,000 ✓ 110,400 ✓ 240,000 X 350,400 ✓

FINANCIAL ACCOUNTING
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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Weighted average cost flow method under perpetual inventory system
The following units of a particular item were available for sale during the calendar year:
Jan. 1 Inventory 9,000 units at $50.00
Mar. 18 Sale 7.000 units
May 2 Purchase 8,000 units at $56.50
Aug. 9 Sale 8,000 units
Oct. 20 Purchase 4,000 units at $60.00
The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale. Present the data in the form illustrated in Exhibit 5. Round your "Unit Cost" answers to two decimal places

**Weighted Average Cost Flow Method** This chart outlines the Weighted Average Cost Flow Method used in inventory accounting. It includes columns for Cost of Goods Sold (quantity, unit cost, total cost) and Inventory (quantity, unit cost, total cost). 1. **Cost of Goods Sold:** - Quantity: - 7,000 - 8,000 - Unit Cost: - $50.00 - $55.20 - Total Cost: - $350,000 - $441,600 The total cost of goods sold is $791,600. 2. **Inventory:** - Initial Quantity: 9,000 at $50 per unit, totaling $450,000. - Subsequent transactions result in: - 2,000 units at $50, totaling $100,000. - 10,000 units at $55.20, totaling $552,000. - 2,000 units at $55.20, totaling $110,400. - There is an error marked for 4,000 units, as the unit cost field is empty, but total cost is $240,000 (marked with an X). - Final inventory is 6,000 units at $58.40 per unit, totaling $350,400. This table helps track the cost flow of inventory using the weighted average, allowing businesses to calculate and adjust inventory values accurately.
Transcribed Image Text:**Weighted Average Cost Flow Method** This chart outlines the Weighted Average Cost Flow Method used in inventory accounting. It includes columns for Cost of Goods Sold (quantity, unit cost, total cost) and Inventory (quantity, unit cost, total cost). 1. **Cost of Goods Sold:** - Quantity: - 7,000 - 8,000 - Unit Cost: - $50.00 - $55.20 - Total Cost: - $350,000 - $441,600 The total cost of goods sold is $791,600. 2. **Inventory:** - Initial Quantity: 9,000 at $50 per unit, totaling $450,000. - Subsequent transactions result in: - 2,000 units at $50, totaling $100,000. - 10,000 units at $55.20, totaling $552,000. - 2,000 units at $55.20, totaling $110,400. - There is an error marked for 4,000 units, as the unit cost field is empty, but total cost is $240,000 (marked with an X). - Final inventory is 6,000 units at $58.40 per unit, totaling $350,400. This table helps track the cost flow of inventory using the weighted average, allowing businesses to calculate and adjust inventory values accurately.
The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale. Present the data in the form illustrated in Exhibit 5. Round your "Unit Cost" answers to two decimal places. **Weighted Average Cost Flow Method** | Date | Purchases Quantity | Purchases Unit Cost | Purchases Total Cost | Cost of Goods Sold Quantity | Cost of Goods Sold Unit Cost | Cost of Goods Sold Total Cost | |------------|--------------------|---------------------|----------------------|-----------------------------|-----------------------------|-----------------------------| | Jan. 1 | | | | | | | | Mar. 18 | | | | | | | | May 2 | 8,000 | 56.50 | 452,000 | | | | | Aug. 9 | | | | 7,000 | 50 | 350,000 | | Oct. 20 | 4,000 | 60 | 240,000 | 8,000 | 55.20 | 441,600 | | Dec. 31 | Balances | | | | | 791,600 | This table illustrates the flow of inventory using the weighted average cost method with specifics on purchases and cost of goods sold throughout the year. - On May 2, 8,000 units were purchased at a unit cost of 56.50, totaling 452,000. - On Aug. 9, 7,000 units were sold at a unit cost of 50, totaling 350,000. - On Oct. 20, 4,000 units were purchased at a unit cost of 60, totaling 240,000. - On Dec. 31, the total cost of goods sold was 791,600. This method averages the costs over the units available, smoothing out fluctuations over time.
Transcribed Image Text:The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale. Present the data in the form illustrated in Exhibit 5. Round your "Unit Cost" answers to two decimal places. **Weighted Average Cost Flow Method** | Date | Purchases Quantity | Purchases Unit Cost | Purchases Total Cost | Cost of Goods Sold Quantity | Cost of Goods Sold Unit Cost | Cost of Goods Sold Total Cost | |------------|--------------------|---------------------|----------------------|-----------------------------|-----------------------------|-----------------------------| | Jan. 1 | | | | | | | | Mar. 18 | | | | | | | | May 2 | 8,000 | 56.50 | 452,000 | | | | | Aug. 9 | | | | 7,000 | 50 | 350,000 | | Oct. 20 | 4,000 | 60 | 240,000 | 8,000 | 55.20 | 441,600 | | Dec. 31 | Balances | | | | | 791,600 | This table illustrates the flow of inventory using the weighted average cost method with specifics on purchases and cost of goods sold throughout the year. - On May 2, 8,000 units were purchased at a unit cost of 56.50, totaling 452,000. - On Aug. 9, 7,000 units were sold at a unit cost of 50, totaling 350,000. - On Oct. 20, 4,000 units were purchased at a unit cost of 60, totaling 240,000. - On Dec. 31, the total cost of goods sold was 791,600. This method averages the costs over the units available, smoothing out fluctuations over time.
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