Chapter 6, Problem 6.18E

1.

To determine

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

In Average Cost Method the cost of inventory is priced at the average rate of the goods available for sale. Following is the mathematical representation:

$\text{Weighted-average Cost}=\frac{\text{Total Cost of Goods Available For Sale}}{\text{Total Number of Units Available For Sale}}$

To prepare: a perpetual inventory schedule using weighted-average method of inventory costing to determine the cost of ending inventory and cost of goods sold for the month.

2.

To determine

To journalize: the inventory transactions using the weighted-average method.