Perpetual inventory using weighted average Beginning inventory, purchases, and sales for Meta-B1 are as follows: July 1 Inventory 100 units at $400 12 Sale 70 units 23 Purchase 120 units at$450 26 Sale 110 units Assuming a perpetual inventory system and using the weighted average method, determine (a) the weighted average unit cost after the July 23 purchase, (b) the cost of the merchandise sold on July 26, and (c) the inventory on July 31.

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 7, Problem 7.4APE
Textbook Problem

Perpetual inventory using weighted averageBeginning inventory, purchases, and sales for Meta-B1 are as follows: July 1 Inventory 100 units at $400 12 Sale 70 units 23 Purchase 120 units at$450 26 Sale 110 units Assuming a perpetual inventory system and using the weighted average method, determine (a) the weighted average unit cost after the July 23 purchase, (b) the cost of the merchandise sold on July 26, and (c) the inventory on July 31.

Expert Solution

(a)

To determine

Perpetual Inventory System:

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.

To determine: the weighted average unit cost after July 23 purchases.

Explanation of Solution

Calculate the weighted average unit cost as follows:

 Weighted average method Quantity Unit cost Total cost of inventory in hand 30 units $400$12,000 120 units $450$54,000 150 units Â \$66,000
Expert Solution

(b)&(c)

To determine
cost of merchandise sold for each sale and inventory balance after each sale of Meta as on July 31.

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