Question

Beginning Merchandise Inventory 12 units at $91March 10 Sold 10 units June 10 Purchased 24 units at $87 October 30 Sold 18 unitsWhat is the amount of the company's ending Merchandise Inventory, as disclosed in the December 31, 2019 balance sheet, using the periodic weighted-−average inventory costing method? (Round the unit costs to two decimal places and total costs to the nearest dollar.)

Answer 1

Answer: $706.64

Explanation:

Given that,

Beginning Merchandise Inventory = 12 units at $91

March 10: Sold = 10 units

June 10: Purchased = 24 units at $87

October 30: Sold = 18 units

Average cost = $\frac{12\times91+24\times87}{36}$

                      =  $\frac{3,180}{36}$

                      = $88.33

Ending inventory units = 36 - 18 - 10

                                      = 8 units

Amount of the company's ending Merchandise Inventory:

= Ending inventory units × Average cost

= 8 units × $88.33

= $706.64