OB).3 1 EX 7-9 Weighted average cost flow method under perpetual inventory system The following units of a particular item were available for sale during the calendar year: Jan. Inventory 4,000 units at $20 Apr. 19 Sale 2,500 units June 30 Purchase 6,000 units at $24 Sept. 2 Sale 4,500 units Nov. 15 Purchase 1,000 units at $25 The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance after each sale. Present the data in the form illustrated in Exhibit 5. 354 Chapter 7 Inventories Entries and Perpetual Inventory Account (Weighted Average) EXHIBIT 5 Item 127B Jan. 4 Accounts Receivable 21,000 Sales 21,000 4 Cost of Merchandise Sold 14,000 Merchandise Inventory 14,000 Purchases Unit Total Quantity Cost Cost Cost of Merchandise Sold Unit Total Quantity Cost Cost Date 10 Merchandise Inventory Accounts Payable 11,200 11,200 Jak. I 700 20.00 14,000 Inventory Unit Total Quantity Cost Cost 1,000 20.00 20,000 300 20.00 6,000 800 21.50 17,200 440 21.50 9,460 200 21.50 4,300 800 22.85 18,280 800 22.85 18,280 4 10,800 10 500 22.40 11,200 10,800 22 Accounts Receivable Sales 22 Cost of Merchandise Sold 7,740 Merchandise Inventory 360 240 21.50 21.50 7,740 5,160 7,740 22 28 30 31 23.30 13,980 600 Balances 26,900 7,200 28 Accounts Receivable 7,200 Sales 28 Cost of Merchandise Sold 5,160 Merchandise Inventory January 31 5,160 Cost of merchandise sold inventory 13,980 30 Merchandise Inventory Accounts Payable 13,980 4. On January 22, 360 units are sold at a price of $30 each for sales of $10,800 (360 units at a selling price of $30 per unit). Using weighted average, the cost of merchandise sold is $7,740 660 units * $21.50 per unit). After the sale, there remains $9,460 of inventory (440 units x $21.50 per unit). 5. The January 28 sale and January 30 purchase are recorded in a similar manner. 6. The ending balance on January 31 is $18,280 (800 units * $22.85 per unit). Example Exercise 7-4 Perpetual inventory Using Beginning imun