Problem 6-5A Marigold Skateshop Ltd. reports the following inventory transaction

Question

Problem 6-5A Marigold Skateshop Ltd. reports the following inventory transactions for its skateboards for the month of April. The company uses the perpetual inventory system Date Explanation Apr 1 Beginning inventory Units Unit Cost Total Cost $1,560 615 $52 30 15 (35) 20 (25) 20 6 Purchases 41 9 Sales 14 Purchases 20 Sales 23 Purchases 37 740 660 Your answer is correct. Determine the cost of goods sold and cost of ending inventory using average cost. (Round answers to 2 decimal places, e.g. 1.25.,) Cost of Goods Sold 2711.11 Cost of Ending Inventory 863.89

Explanation / Answer

Date Explanation Units Unit cost Total Cost Apr. 1 Beginning Inventory 30 $52 $1,560 6 Purchases 15 41 615 $2,175 ÷ 45 units $ 48.3333 9 Sales -35                14 Purchases 20 37 740 +48.3333*10 units = 483.33 $ 1,223.33 ÷ 30 units $ 40.7777 20 Sales -25 28 Purchases 20 33 660 +40.7777*5 units = 203.89 863.89 ÷ 25 units      34.5556 Cost of goods sold = 48.3333*35+40.7777*25 = 2711.11 Ending Inventory = 863.89 Since cost of ending inventory for 25 units is $863.89, cost of 1 unit comes to 34.56 rounded Journal entry will be Account titles and explanation Debit Credit Cost of goods sold $           34.56 Inventory $    34.56 Merchandise Inventory Overstated $34.56 Cost of goods sold Understated $34.56 Retained earnings Overstated $34.56

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.