Required information Altira Corporation uses a perpetual inventory system. The f
ID: 2508084 • Letter: R
Question
Required information
Altira Corporation uses a perpetual inventory system. The following transactions affected its merchandise inventory during the month of August 2018:
3. Determine the inventory balance Altira would report in its August 31, 2018, balance sheet and the cost of goods sold it would report in its August 2018 income statement using the Average cost method. (Round "Average Cost per Unit" to 2 decimal places.)
Aug.1 Inventory on hand—3,900 units; cost $8.00 each. 8 Purchased 19,500 units for $7.40 each. 14 Sold 15,600 units for $13.90 each. 18 Purchased 11,700 units for $6.60 each. 25 Sold 14,600 units for $12.90 each. 31 Inventory on hand—4,900 units.Explanation / Answer
Solution:
Perpetual Weighted Average Method
Perpetual Weighted Average
Goods Purchased
Cost of Goods Sold
Inventory Balance
# of units
Unit Cost
Cost per unit
# of units
Cost per unit
Cost of goods sold
Total Cost of Goods (a)
Total Available Units (b)
Unit Average Cost (a/b)
Beginning Inventory Aug.1
$31,200.00
3900
$8.00
Purchases Aug. 8
19500
$7.40
$144,300.00
$31,200.00
3900
$144,300.00
19500
$175,500.00
23400
$7.50
Sales Aug.14
15600
$7.50
$117,000
$58,500.00
7800
$7.50
Purchases Aug. 18
11700
$6.60
$77,220.00
$58,500.00
7800
$77,220.00
11700
$135,720.00
19500
$6.96
Sales Aug.25
14600
$6.96
$101,616
$34,104.00
4900
$6.96
TOTAL
$218,616
Cost of Goods Sold = $218,616
Ending Inventory = $34,104
Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you
Perpetual Weighted Average
Goods Purchased
Cost of Goods Sold
Inventory Balance
# of units
Unit Cost
Cost per unit
# of units
Cost per unit
Cost of goods sold
Total Cost of Goods (a)
Total Available Units (b)
Unit Average Cost (a/b)
Beginning Inventory Aug.1
$31,200.00
3900
$8.00
Purchases Aug. 8
19500
$7.40
$144,300.00
$31,200.00
3900
$144,300.00
19500
$175,500.00
23400
$7.50
Sales Aug.14
15600
$7.50
$117,000
$58,500.00
7800
$7.50
Purchases Aug. 18
11700
$6.60
$77,220.00
$58,500.00
7800
$77,220.00
11700
$135,720.00
19500
$6.96
Sales Aug.25
14600
$6.96
$101,616
$34,104.00
4900
$6.96
TOTAL
$218,616
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.