Question: Assume that the business in Exercise 6-
Assume that the business in Exercise 6-9 maintains a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale, assuming the first-in, first-out method. Present the data in the form illustrated in Exhibit 3.
Exhibit 3:
Exercise 6-9:
The following units of a particular item were available for sale during the calendar year:
The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale. Present the data in the form illustrated in Exhibit 5.
Exhibit 5:
Transcribed Image Text:
Item 127B Jan. 4 Accounts Receivable 21,000 Cost of Sales 21,000 Purchases Goods Sold Inventory Total 4 Cost of Goods Sold 14,000 Unit Total Date Quantity Cost Cost Quantity Unit Total Cost Cost Quantity 1,000 Unit Inventory 14,000 Cost Cost Jan. 1 20.00 20,000 10 Inventory 11,200 4 700 20.00 14,000 300 20.00 6,000 Accounts Payable 11,200 10 500 22.40 11,200 300 20.00 6,000 22 Accounts Receivable 10,800 500 22.40 11,200 20.00 6,000 22.40 1,344 22.40 5,376 Sales 10,800 22 300 22 Cost of Goods Sold 7,344 60 440 22.40 9,856 Inventory 7,344 28 240 200 22.40 4,480 30 600 23.30 13,980 200 22.40 4,480 28 Accounts Receivable 7,200 23.30 13,980 600 Sales 7,200 31 Balances 26,720 18,460 28 Cost of Goods Sold 5,376 Inventory 5,376 Cost of 30 Inventory January 31 13,980 goods sold inventory Accounts Payable 13,980 Jan. 1 Inventory 4,000 units at $40 Apr. 19 Sale 2,500 units June 30 Purchase Sept. 2 Nov. 15 4,500 units at $44 5,000 units 2,000 units at $46 Sale Purchase Item 127B Jan. 4 Accounts Receivable 21,000 Cost of Sales 21,000 Goods Sold Inventory Unit Total Date Quantity Cost Cost Quantity Cost Cost Quantity Cost Purchases 4 Cost of Goods Sold 14,000 Unit Total Unit Total Inventory 14,000 Cost 10 Inventory Jan. 1 1,000 20.00 20,000 11,200 Accounts Payable 11,200 -4 700 20.00 14,000 300 20.00 6,000 -10 500 22.40 11,200 800 21.50 17,200 7,740 21.50 5,160 22 Accounts Receivable 10,800 -22 360 21.50 440 21.50 9,460 4,300 22.85 18,280 22.85 18,280 Sales 10,800 28 240 200 21.50 22 Cost of Goods Sold 7,740 30 600 23.30 13,980 800 Inventory 7,740 31 Balances 26,900 800 28 Accounts Receivable 7,200 Sales 7,200 Cost of January 31 inventory 28 Cost of Goods Sold 5,160 goods sold Inventory 5,160 30 Inventory 13,980 Accounts Payable 13,980
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> Why is it important to periodically take a physical inventory when using a perpetual inventory system?
