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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Chapter 6, Problem 18MCQ, ( Appendix 6B) Refer to the information for Morgan Inc. above. If Morgan uses a periodic inventory

( Appendix 6B) Refer to the information for Morgan Inc. above. If Morgan uses a periodic inventory system, what is the cost of ending inventory under average cost at April 30? ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.)

a. $34,667

b. $35,838

c. $66,162

d. $67,333

To determine

Concept introduction:

Periodic Inventory System:

The periodic inventory system records and updates the inventory at the end of a particular period. The inventory balance is not updated after each transaction and it is updated periodically.

Average method:

Under this method, the cost per unit of the inventory is calculated as weighted average cost per unit and the cost of goods sold and inventory is calculated with the help of weighted average cost per unit.

To calculate:

The Cost of ending inventory under Average Cost Periodic inventory system.

Explanation

The Cost of ending inventory under Average Cost Periodic inventory system is calculated as follows;

Morgan Inc.
Periodic Inventory Record-Average Cost
Unit Rate Total Cost
Beginning Inventory 1200 $ 25.0000 $ 30,000
Purchase -1, Apr...

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