Question 7 (10 points) Alpha Company uses the periodic inventory system and had
ID: 2414836 • Letter: Q
Question
Question 7 (10 points)
Alpha Company uses the periodic inventory system and had the following inventory & sales activity for the month of May 2016:
DATE
5/1
ACTIVITY
Beginning Inventory
100
UNIT PRICE
$12
DATE
5/5
ACIVITY
Purchase
QUANTITY
200
UNIT PRICE
$13
DATE
5/15
ACIVITY
Purchase
QUANTITY
300
UNIT PRICE
$14
DATE
5/25
ACIVITY
Purchase
QUANTITY
200
UNIT PRICE
$15
Sales were 500 units, Ending Inventory was 300. Using the Weighted Average method, determine the dollar values following for the month of May:
1. Ending Inventory
2. Cost of Goods Available for Sale
3. Cost of Goods Sold Question 7 options:
Explanation / Answer
Answers
Average Method
Cost of Goods available for sale
Units
Cost/unit
COG for sale
Beginning Inventory
100
$ 12.00
$ 1,200.00
Purchases:
05-May
200
$ 13.00
$ 2,600.00
15-May
300
$ 14.00
$ 4,200.00
25-May
200
$ 15.00
$ 3,000.00
$ -
TOTAL
800
13.75
$ 11,000.00
Cost of Goods for sale = $ 11,000
Units available for sale = 800 units
Weighted Average cost = 11000 / 800 = $ 13.75 per unit.
Ending Inventory = 300 units = 300 units x $ 13.75 per unit = $ 4,125
Cost of Goods available for Sale = $ 11,000 [refer to the above working]
Cost of Goods Sold = 500 units sold = 500 units x $ 13.75 per unit = $ 6,875
Average Method
Cost of Goods available for sale
Units
Cost/unit
COG for sale
Beginning Inventory
100
$ 12.00
$ 1,200.00
Purchases:
05-May
200
$ 13.00
$ 2,600.00
15-May
300
$ 14.00
$ 4,200.00
25-May
200
$ 15.00
$ 3,000.00
$ -
TOTAL
800
13.75
$ 11,000.00
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.