Required information [The following information applies to the questions displayed below.] A company began January with 8,000 units of its principal product. The cost of each unit is $7. Inventory transactions for the month of January are as follows: Date of Purchase January 10 January 18 Totals Sales Units Date of Sale January 5 January 12 January 20 Total 6,000 8,000 14,000 * Includes purchase price and cost of freight. Purchases Unit Cost* Units 4,000 2,000 5,000 11,000 $8 9 11,000 units were on hand at the end of the month. Total Cost $ 48,000 72,000 $ 120,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Required information
[The following information applies to the questions displayed below.]
A company began January with 8,000 units of its principal product. The cost of each unit is $7. Inventory transactions for
the month of January are as follows:
Date of Purchase
January 10
January 18
Totals
Sales
Units
6,000
8,000
14,000
Date of Sale
January 5
January 12
January 20
Total
Includes purchase price and cost of freight.
Purchases
Unit Cost*
Units
4,000
2,000
5,000
11,000
$8
9
11,000 units were on hand at the end of the month.
Total Cost
$ 48,000
72,000
$ 120,000
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] A company began January with 8,000 units of its principal product. The cost of each unit is $7. Inventory transactions for the month of January are as follows: Date of Purchase January 10 January 18 Totals Sales Units 6,000 8,000 14,000 Date of Sale January 5 January 12 January 20 Total Includes purchase price and cost of freight. Purchases Unit Cost* Units 4,000 2,000 5,000 11,000 $8 9 11,000 units were on hand at the end of the month. Total Cost $ 48,000 72,000 $ 120,000
4. Calculate January's ending inventory and cost of goods sold for the month using Average cost, periodic system.
Average Cost
Beginning Inventory
Purchases:
January 10
January 18
Total
Cost of Goods Available for Sale
Cost of
Goods
Number Unit
of units Cost Available for
Sale
8,000 $7.00
6,000 $8.00
8,000 $9.00
22,000
$ 56,000
$
48,000
72,000
176,000
Cost of Goods Sold - Average Cost
Average
Cost per
Unit
Number of
units sold
Cost of
Goods Sold
$
0
Ending Inventory - Average Cost
Number of
Average
units in
ending
inventory
Cost per
unit
Ending
Inventory
$
0
Transcribed Image Text:4. Calculate January's ending inventory and cost of goods sold for the month using Average cost, periodic system. Average Cost Beginning Inventory Purchases: January 10 January 18 Total Cost of Goods Available for Sale Cost of Goods Number Unit of units Cost Available for Sale 8,000 $7.00 6,000 $8.00 8,000 $9.00 22,000 $ 56,000 $ 48,000 72,000 176,000 Cost of Goods Sold - Average Cost Average Cost per Unit Number of units sold Cost of Goods Sold $ 0 Ending Inventory - Average Cost Number of Average units in ending inventory Cost per unit Ending Inventory $ 0
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