The beginning inventory for Midnight Supplies and data on purchases and sales for a three-month period are shown in Problem 7-1A.
Instructions
1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 5, using the weighted average cost method.
2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period.
3. Determine the ending inventory cost as of March 31.
Answer:
1.
Unit Total TotalTotal
Quantity Cost Cost Quantity Unit Cost Cost Quantity Unit Cost Cost
Jan. 17,500 75.00 562,500
10 22,500 85.00 1,912,50030,000 82.50 2,475,000
2811,250 82.50 928,125 18,750 82.50 1,546,875
303,750 82.50 309,375 15,000 82.50 1,237,500
Feb. 51,500 82.50 123,750 13,500 82.50 1,113,750
10 54,000 87.50 4,725,00067,500 86.50 5,838,750
1627,000 86.50 2,335,500 40,500 86.50 3,503,250
2825,500 86.50 2,205,750 15,000 86.50 1,297,500
Mar. 5 45,000 89.50 4,027,50060,000 88.75 5,325,000
1430,000 88.75 2,662,500 30,000 88.75 2,662,500
25 7,500 90.00 675,00037,500 89.00 3,337,500
3026,250 89.00 2,336,250 11,250 89.00 1,001,250
31 Balances10,901,250 1,001,250
2. Total sales………………………………………………………………… $19,875,000
Total cost of merchandise sold……………………………………… 10,901,250
Gross profit……………………………………………………………… $ 8,973,750
*Total sales = $1,687,500 + $562,500 + $225,000 + $4,320,000 + $4,080,000 + $4,800,000 + $4,200,000 = $19,875,000
3. $1,001,250 (11,250 × $89.00)