18E_1 - Horngren'S Financial And Managerial Accounting

Question

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.

Step-by-Step Solution

Answer

Ending Inventory:$136

COGS:$3,236

Step-by-Step-Solution Step1: 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 30^th Nov amounts to $136 and the COGS for the period amounts to $3,236.