Weighted Average Cost (Periodic) Units Cost Goods Available for Sale Cost of Goods Sold Ending Inventory
Weighted Average Cost (Periodic) Units Cost Goods Available for Sale Cost of Goods Sold Ending Inventory
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter7: Inventories
Section: Chapter Questions
Problem 4PB: The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are...
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Step 1 Introduction
Inventory Valuation: It is an asset held for sale in the ordinary course of business. It is used in the process of production for such sale it is consumed in the process of production. Inventory will be valued at cost or net realizable value whichever is lower. It should be valued on an individual item basis and not on a total basis.
Step 2 a) Statement showing the Inventory valuation by Last in first out method
Inventory valuation | ||||||||||
Last In First Out method | ||||||||||
Date | Receipt | cost of goods sold | Balance | |||||||
Particular | Unit | Rate ($) | Amount ($) | Unit | Rate ($) | Amount ($) | Unit | Rate ($) | Amount ($) | |
1 January | Opening stock | - | - | - | - | - | - | 200 | 30 | 6,000 |
2 March | Purchase | 300 | 32 | 9600 | - | - | - | 200 | 30 | 6,000 |
- | - | - | - | - | - | 300 | 32 | 9600 | ||
1 April | Sale | - | - | - | 300 | 32 | 9,600 | 150 | 30 | 4,500 |
- | - | - | 50 | 30 | 1,500 | - | - | - | ||
30 June | Purchase | 250 | 36 | 9,000 | - | - | - | 150 | 30 | 4,500 |
- | - | - | - | - | - | 250 | 36 | 9,000 | ||
1 August | Sale | - | - | - | 50 | 36 | 1,800 | 150 | 30 | 4,500 |
- | - | - | - | - | - | 200 | 36 | 7,200 | ||
550 | 18,600 | 400 | 12,900 | 350 | 11,700 |
Step 3 a) Answer
LIFO (Periodic) | ||
Particular | Units | Cost |
Goods available for sale | 550 | 18,600 |
Cost of goods sold | 400 | 12,900 |
Ending Inventory | 350 | 11,700 |
Step 4 b) Statement showing the Inventory valuation by Weighted average method
Inventory valuation | ||||||||||
Weighted average method | ||||||||||
Date | Receipt | cost of goods sold | Balance | |||||||
Particular | Unit | Rate ($) | Amount ($) | Unit | Rate ($) | Amount ($) | Unit | Rate ($) | Amount ($) | |
1 January | Opening stock | - | - | - | - | - | - | 200 | 30 | 6,000 |
2 March | Purchase | 300 | 32 | 9600 | - | - | - | 300 | 32 | 9600 |
- | - | - | - | - | - | 500 | 31.2 | 15,600 | ||
1 April | Sale | - | - | - | 350 | 31.2 | 10,920 | 150 | 31.2 | 4,680 |
- | - | - | - | - | - | |||||
30 June | Purchase | 250 | 36 | 9,000 | - | - | - | 150 | 31.2 | 4,680 |
- | - | - | - | - | - | 250 | 36 | 9,000 | ||
400 | 34.2 | 13,680 | ||||||||
1 August | Sale | - | - | - | 50 | 34.2 | 1,710 | 350 | 34.2 | 11,970 |
550 | 18,600 | 400 | 12,630 | 350 | 11,970 |
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