Concept explainers
The beginning inventory for Midnight Supplies and data on purchases and sales for a three-month period are as follows.
Required:
1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 5, using the weighted average cost method. Round unit cost to two decimal places, if necessary. Round all total cost amounts to the nearest dollar.
2. Determine the total sales, the total cost of goods sold, and the gross profit from sales for the period.
Total sales | $_______________ |
Total cost of goods sold | $_______________ |
Gross profit | $_______________ |
3. Determine the ending inventory cost as of March 31.
$___________
The inventory valuation can be done using different systems like perpetual inventory system or periodic inventory system. Under the perpetual inventory system, the cost of goods sold is recorded at the time of sale transaction while under the periodic inventory system, the change in inventory is recorded at the end of the period.
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