Chapter 7, Problem 7.4APE

### Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

Chapter
Section

### Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
64 views

# Perpetual inventory using weighted averageBeginning inventory, purchases, and sales for 30xT are as follows:Assuming a perpetual inventory system and using the weighted average method, determine (a) the weighted average unit cost after the May 23 purchase, (b) the cost of the merchandise sold on May 26, and (c) the inventory on May 31.

(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.

the weighted average unit cost after May 23 purchases.

Explanation

Calculate the weighted average unit cost as follows:

 Weighted average method Quantity Unit cost Total cost of inventory in hand 15 units $80$1,200 60 units $90$5,400 75 units \$6,600

Table (1)

(b) & (c)

To determine

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

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