Problem 6-8A Date Description Quantity Unit Cost or Selling Price Moving-Average
ID: 2462308 • Letter: P
Question
Problem 6-8A
Date
Description
Quantity
Unit Cost or Selling Price
Moving-Average Cost per unit
LINK TO TEXT
LIFO
FIFO
Moving-average
Problem 6-8A
Dempsey Inc. is a retailer operating in British Columbia. Dempsey uses the perpetual inventory method. All sales returns from customers result in the goods being returned to inventory; the inventory is not damaged. Assume that there are no credit transactions; all amounts are settled in cash. You are provided with the following information for Dempsey Inc. for the month of January 2017.Date
Description
Quantity
Unit Cost or Selling Price
January 1 Beginning inventory 100 $20.000 January 5 Purchase 150 23 January 8 Sale 110 33 January 10 Sale return 10 33 January 15 Purchase 55 25 January 16 Purchase return 5 25 January 20 Sale 100 37 January 25 Purchase 40 27Explanation / Answer
1.) Moving-average cost per unit at January:
January 1 100 *$20 = $2000 $2000/100 = $20 per unit
January 5 100 *$20 = $2000
150 *$23 =$3450
250 $5450 $5450 / 250 = $21.8 per unit
Janaury 8 (110) * $21.8 = ($2398)
10 10 * $21.8 = $218
Net sale (100) ($2180) ($5450 - $2180) / (250-100) =$3270/150units =$21.8per unit
Januray 15 55 * $25 = $1375 ($3270 + $1375) / (150 +55) = $22.66 per unit
January 16 (5 units) * $25 = ($125) ($3270 + $1375 -$125) / (150 +55-5)= $22.6 per unit
January 20 (100 unit ) * $22.6 = ($2260) ($3270 + $1375 -$125-2260) / (150 +55-5-100)=$22.6 per unit
January 25 40 units * $27 =$1080 ($3270 + $1375 -$125-2260+1080) /(150 +55-5-100+40)=$23.86 per unit
Note:- Units sold are considered to be cost of goods sold , and need to be deducted from total cost till dates ; cost of goods sold = units sold * average moving cost per unit till dates
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