The following units of a particular item were available for sale during the calendar year:Jan. 1Inventory30,000units at $30.00Mar. 18Sale24,000unitsMay 2Purchase54,000units at $31.00Aug. 9Sale45,000unitsOct. 20Purchase21,000units at $32.10The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance after each sale. Present the data in the form illustrated in Exhibit 5. Round unit cost to two decimal places, if necessary.Schedule of Cost of Merchandise SoldWeighted Average Cost Flow Method PurchasesCost of Merchandise SoldInventoryDateQuantityUnit CostTotal CostQuantityUnit CostTotal CostQuantityUnit CostTotal CostJan. 1       $$Mar. 18    $$   May 2 $$      Aug. 9         Oct. 20         Dec. 31Balances    $ $$

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Asked Sep 30, 2019
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The following units of a particular item were available for sale during the calendar year:

Jan. 1 Inventory 30,000 units at $30.00
Mar. 18 Sale 24,000 units
May 2 Purchase 54,000 units at $31.00
Aug. 9 Sale 45,000 units
Oct. 20 Purchase 21,000 units at $32.10

The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance after each sale. Present the data in the form illustrated in Exhibit 5. Round unit cost to two decimal places, if necessary.

Schedule of Cost of Merchandise Sold
Weighted Average Cost Flow Method
  Purchases Cost of Merchandise Sold Inventory
Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost
Jan. 1               $ $
Mar. 18         $ $      
May 2   $ $            
Aug. 9                  
Oct. 20                  
Dec. 31 Balances         $   $ $
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Expert Answer

Step 1

Calculate the cost of merchandise sold and ending inventory. (Weighted average method).

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Cost of merchandise sold Purchase Inventory Quantity Unit cost Total cost Quantity Unit cost Total cost Quantity Unit cost Total cost Date $30 $900,000 S30 S180,000 60,000 S30.90 (1) $1,854,000 S30.90 463,500 36,000 S31.60 (2) S1,137,600| $1,137,600 30,000 S30 S720,000 6,000| 1-Jan 24,000 18-Mar 54,000 $31 $1,674,000 2-May 45,000 $30.90 s1,390,500|15,000| 9-Aug 21,000 $32.10 20-Oct $674,100 36,000 $2,110,500

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Step 2

Working Notes:

(1) Calculate the weighted average unit cost after May 2nd purchase.

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Total cost of inventory in hand Quantity Unit Cost $30 6,000 units 180,000 1,674,000 1.854,000 54,000 units 60,000 units $31 Total cost of inventory (Weighted Average in hand Total quantity Unit Cost $1,854,000 60.000 =S30.90

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Step 3

(2) Calculate the weighted average unit cost aft...

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Total cost of inventory in hand Quantity Unit Cost $30.90 $463,500 $674,100 1,137,600 15,000 units 21,000 units 36.000 units $32.10 Total cost of inventory (Weighted Average in hand Total quantity Unit Cost $1,137,600 36,000 =S31.60

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