SeCo begins operations in 20X6 and uses the periodic method

SeCo begins operations in 20X6 and uses the periodic method and weighted-average costing. SeCo has the following merchandise purchases during 20X6: 700 units in March @ $4; 1,100 units in July@$6; and 2,200 units in October $7. A physical count of ending inventory finds 1,000 units. Calculate the cost of goods sold 16. a. $6,200 b. $7,000 c. $18,600 d. $24,000

Solution

Solution Qn 16 option ( c ) Date Transacton Unit Price Cost 20x6 March Purchase 700 $ 4 $ 2,800 July Purchase 1,100 $6 $ 6,600 Oct Purchase 2,200 $ 7 $ 15,400 4,000 unit $ 24800 Weighted average cost per unit = Total cost/Total unit $24800/4000 unit $ 6.2 per unit Unit sold = purchase unit - closing stock =   4,000 - 1,000 = 3000 unit Cost of Goods sold = unit sold x Weighted average cost per unit = 3,000 x $ 6.2 =    $18,600 Solution Q.n. 17 Option (a) Date Transacton Unit Price Cost 20x6 1-1-20x4 Opening Stock 2,500 $32500/2500=$13 $ 32,500 May Purchase 1,700 $ 14 $ 23,800 June Purchase 3,500 $ 19 $ 66,500 Oct Purchase 2,300 $ 21 $ 48300 10,000 Unit $ 171,100 Weighted average cost per unit = Total cost/Total unit $ 171,100 / 10,000 $ 17.11 per unit Cost of Closing Inventor = Closing inventory x weighted average cost per unit = 1,200 unit x $ 17.11 = $ 20,532 Q.n. 18 option (b) Date Transaction Unit Rate Amount 1-1-20x8 Opening Stock 1,800 $ 5 $ 9,000 January Purchase 4,000 $ 9 $ 36,000 Oct Purchase 4,400 $ 7 $ 30,800 Less :- January Purchase return 700 $ 9 ( $ 6,300) Oct Purchase return 500 $ 7 ( $ 3,500) 9,000 unit $ 66,000 Weighted average cost per unit = Total cost/Total unit $ 66,000 / 9,000 $ 7.33 Q.n. 19 option (b) Date Particular Unit Rate Amount Jan-04 Purchase 1,200 $ 3 $ 3,600 Jan-08 Sell 300 $ 3 ( $ 900) 900 $ 2700/ 900=$3 2,700 purchase 1,100 $ 4 $ 4,400 2,000 $ 7,100/2,000=3.55 $ 7,100 Sell 600 $ 3.55 $ 2130 Under perpetual method and moving average costing method stock is recalculated after every inventory purchase and sale Please feel free to ask if anything about above solution in comment section of the question.