Page 313 - Accounting Principles (A Business Perspective)

7. Measuring and reporting inventories

Unit Total

Units Cost Cost
Merchandise Inventory, January 1 5,000 $3.00 $ 15,000
4. Ending inventory under weighted-average:
(a) Perpetual:
Purchased Sold Balance
Unit Total Unit Total Unit
Date Units Cost Cost Units Cost Cost Units Cost Total Cost
Beg. inv. 6,250 $3.0000 $18,750
Feb. 3 5,250 $3.00 $15,750 1,000 3.0000 3,000
Mar. 15 5,000 $3.12 $15,600 6,000 3.1000 18,600
a
May 4 4,500 3.10 13,950 1,500 3.1000 4,650
May 10 8,750 3.30 28,875 10,250 3.2707 33,525
b
Aug. 12 6,250 3.48 21,750 16,500 3.3500 55,275
c
Sept. 16 8,000 3.35 26,800 8,500 3.3500 28,475 *
Oct. 9 7,250 3.35 24,288 1,250 3.3500 4,187 *
Nov. 20 3,750 3.72 13,950 5.000 3.6274 18,137
d
Ending inventory = (5,000 X $3.6274) = $18,137
$18,600 a = $3.100 $33,525 = $3.2707 $55,275 = $3.3500 $18,137 = $3.6274
b
d
c
6,000 10,250 16,500 5,000
* Rounding difference.
(b) Periodic Unit Total
Purchased Units Cost Cost
Merchandise Inventory, January 6,250 $3.00 $ 18,75
1 0
March 15 5,000 3.12 15,60
0
May 10 8,750 3.30 28,87
5
August 12 6,250 3.48 21,75
0
November 20 3,750 3.72 13,95
0
30,000 $ 98,92
5
Weighted-average unit cost = $98,925/30,000 = $3.2975
Ending inventory cost = $3.2975 x 5,000 = $16,488*
*Rounding difference
b. Journal entries under LIFO perpetual:

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