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The beginning inventory for Midnight Supplies and data on purchases and sales for a three-month period are as follows: Date TransactionNumber of UnitsPer UnitTotalJan
The beginning inventory for Midnight Supplies and data on purchases and sales for a three-month period are as follows:
Date TransactionNumber
of UnitsPer UnitTotalJan. 1 Inventory7,400 $76.00 $562,400 10 Purchase22,200 86.00 1,909,200 28 Sale11,100 152.00 1,687,200 30 Sale3,700 152.00 562,400 Feb. 5 Sale1,480 152.00 224,960 10 Purchase53,280 88.50 4,715,280 16 Sale26,640 162.00 4,315,680 28 Sale25,160 162.00 4,075,920 Mar. 5 Purchase44,400 90.50 4,018,200 14 Sale29,600 162.00 4,795,200 25 Purchase7,400 91.00 673,400 30 Sale25,900 162.00 4,195,800
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.
3.Determine the ending inventory cost as of March 31.
Expert Solution
| 1) Midnight Supplies | |||||||||
| Schedule of Cost of Goods Sold | |||||||||
| Weighted Average Cost Method | |||||||||
| For the Three Months Ended March 31 | |||||||||
| Purchases | Cost of Goods Sold | Inventory | |||||||
| Date | Quantity | Unit Cost | Total Cost | Quantity | Unit Cost | Total Cost | Quantity | Unit Cost | Total Cost |
| Jan. 1 | 7400 | $76.00 | $562,400 | ||||||
| Jan. 10 | 22200 | $86.00 | $1,909,200 | 29600 | $83.50 | $2,471,600 | |||
| Jan. 28 | 11100 | $83.50 | $926,850 | ||||||
| Jan. 30 | 3700 | $83.50 | $308,950 | ||||||
| Feb. 5 | 1480 | $83.50 | $123,580 | 13320 | $83.50 | $1,112,220.00 | |||
| Feb. 10 | 53280 | $88.50 | $4,715,280.00 | 66600 | $87.50 | $5,827,500.00 | |||
| Feb. 16 | 26640 | $87.50 | $2,331,000.00 | ||||||
| Feb. 28 | 25160 | $91.50 | 2208810 | 14800 | $87.50 | $1,295,000.00 | |||
| Mar. 5 | 44400 | $90.50 | $4,018,200.00 | 59200 | $89.75 | $5,313,200.00 | |||
| Mar. 14 | 29600 | $89.75 | $2,656,600.00 | 29600 | $89.75 | $2,656,600.00 | |||
| Mar. 25 | 7400 | $91.00 | $673,400.00 | 37000 | $90.00 | $3,330,000.00 | |||
| Mar. 30 | 25900 | $90.00 | $2,331,000.00 | 11100 | $90.00 | $999,000.00 | |||
| Mar. 31 | Balances | $123,580 | $10,886,790 | 11100 | $999,000 | ||||
Workings:
Average Cost per Unit = Total Cost/Total Quantity
For Example On January 10:
Total Cost = $562,400+$1,909,200 = $2,471,600
Total Quantity = 7,400 + 22,200 = 29,600
Average Cost per Unit = $2,471,600/29,600 = $83.50
For Example On February 10:
Total Cost = $1,112,220 + $4,715,280 = $5,827,500
Total Quantity = 13,320 + 53,280 = 66,600
Average Cost per Unit = $5,827,500/66,600 = $87.50
2)
Computation of Total Sales:
| Date | Unit | Sales Price | Total |
| 28-Jan | 11,100 | 152 | 1687200 |
| 30-Jan | 3700 | 152 | 562400 |
| 05-Feb | 1480 | 152 | 224960 |
| 16-Feb | 26640 | 162 | 4315680 |
| 28-Feb | 25160 | 162 | 4075920 |
| 14-Mar | 29600 | 162 | 4795200 |
| 30-Mar | 25900 | 162 | 4195800 |
| 123,580 | 19,857,160 |
| Total sales | $19,857,160 |
| Total cost of goods sold | $10,886,790 |
| Gross profit | $8,970,370 |
3) The ending inventory cost as of March 31 is $999,000.
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