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18E_1

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Horngren'S Financial And Managerial Accounting
Found in: Page 362

Short Answer

Question: Golf Unlimited carries an inventory of putters and other golf clubs. The sales price of each putter is $119. Company records indicate the following for a particular line ofGolf Unlimited’s putters:

Date Item Quantity Unit Cost

Nov. 1 Balance 24 $ 53

6 Sale 20

8 Purchase 30 70

17 Sale 30

30 Sale 2

Requirements

1. Prepare Golf Unlimited’s perpetual inventory record for the putters assuming GolfUnlimited uses the weighted-average inventory costing method. Round weightedaveragecost per unit to the nearest cent and all other amounts to the nearest dollar.Then identify the cost of ending inventory and cost of goods sold for the month.

Ending Inventory:$136

COGS:$3,236

See the step by step solution

Step by Step Solution

Step-by-Step-SolutionStep1: Perpetual Inventory Record using LIFO

Date

Purchase/opening

Sales

Balance

Units

Cost per unit

Amount

Units

Cost per unit

Amount

Units

Cost per unit

Amount

Nov 1

24

$53

$1,272

24

$53

$1,272

6

20

$53

$1,060

4

$53

$212

8

30

$70

$2,100

34

$68

$2,312

17

30

$68

$2,040

4

$68

$272

30

2

$68

$136

2

$68

$136

Total

54

$3,372

52

$3,236

2

$68

$136

Step 2: Ending inventory and COGS

Ending inventory in the perpetual system under the weighted average method is the value of ending inventory at the average cost and the COGS would also be based on the average prices.

In the given case, the ending inventory on 30th Nov amounts to $136 and the COGS for the period amounts to $3,236.

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