Question

The Rowing Company made purchases of a particular product in the current year as follows: Jan. 1 Beginning Inventory 120 units $24.00 $ 2,880 Jun. 15 Purchased 100 units $26.00 $ 2,600 Nov. 20 Purchased 325 units @ $30.00 $ 9,750 II 11 II The Rowing Company made sales on the following dates at a selling price of $68 per unit: Feb. 15 30 units June 22 86 units Dec. 14 120 units Total 236 units Instructions: The business uses a perpetual inventory system. 1. Use Moving Weighted Average to determine the costs that should be assigned to the ending inventory and to Cost of Goods Sold. Make sure that you complete the Totals of the columns for the Units and Total Cost for each section of the worksheet. The row for totals is located at the bottom of the worksheet. Use the data entry form located in the Learn Assessment Dropbox or the Learn Content assignment section for Module 6. 2. Using information from your answers in Part 1, prepare the journal entries for the credit sale to Chickadee Company on June 22 and the credit purchase on November 20 from Wolf Co. Use the General Journal data entry worksheet on the data entry form locate in the Learn Assessment Dropbox or the Learn Content assignment section for Module 6.

Answer 1

Working notes

1

Balance of inventory June 15

1 2 Purchase unit Total cost Cost $24 $2,880 3 Date Unit 4 Jan 1 120 5 Feb-15 Cost of good sold Merchandise inventory unit Total unit Unit cost Cost Unit cost Total Cost 120 $24 $2,880 30 24 $720 90 $24 $2,160 190 $25.05 $4,760 86 25.05 $2154.3 104 $25.05 $2605.7 429 28.8 $12,355.7 $28.8 $3,456 $8,899.7 6 100 $26 $2,600 7 June 15 June 22 Nov 22 Dec 14 8 325 $30 $9750 9 120 10 11 TOTAL 545 15230 236 6330.3 $8,899.7 12 Cost of goods available for sales cost of goods sold Ending inventory Cost of goods available for sales = cost of goods sold + ending inventory 15230=6330.3+8899.7 13 14 15 16

(100+90)=190 unit

COST= 2,160 + 2,600 =$4,760

Average cost = 4,760/190

2

Balance of inventory Nov 20(104+325) =429unit

Cost =9,750 + 2,605.7 = $12355.7

Average cost = 12355.7/429 = 28.80

General entry

Date	Particular	Debit	Credit
June 22	Account receivable A/C dr	5848
	To sales		5848

Sales 86 unit for credit on rate 68 pet unit to chickkadee company

Nov 20	Purchase A/C Dr	9750
	To account payable		9750

(Purchase 325 unit from on credit wolf co.at the rate 30 per unit)

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