Lewis Company had the following balances and transactions during 2014: $$\begin{array} { | l | l | }
\hline \text { Beginning Merchandise Inventory } & 100 \text { units at } \$ 80 \
\hline \text { March } 10 & \text { Sold } 50 \text { units } \
\hline \text { June 10 } & \text { Purchased } 200 \text { units at } \$ 82 \
\hline \text { October 30 } & \text { Sold } 150 \text { units } \
\hline
\end{array}$$ What would the Cost of Goods Sold be as reported on the income statement for the year ending December 31, 2014 if the perpetual weighted-average costing method is used? (Round your intermediate calculations to two decimal places)

Question

Lewis Company had the following balances and transactions during 2014: $$\begin{array} { | l | l | } 
\hline \text { Beginning Merchandise Inventory } & 100 \text { units at } \$ 80 \
\hline \text { March } 10 & \text { Sold } 50 \text { units } \
\hline \text { June 10 } & \text { Purchased } 200 \text { units at } \$ 82 \
\hline \text { October 30 } & \text { Sold } 150 \text { units } \
\hline
\end{array}$$ What would the Cost of Goods Sold be as reported on the income statement for the year ending December 31, 2014 if the perpetual weighted-average costing method is used? (Round your intermediate calculations to two decimal places)

Quizplus · Accepted Answer

Using the perpetual weighted-average costing method, we need to calculate the weighted-average unit cost before calculating the cost of goods sold.

March 10:
- 50 units sold at an average cost of $(100 units x $80 + 0 units x $82) / 100 units = $80 per unit.

June 10:
- 200 units purchased at $82 per unit, which makes the total units 250. 
- Weighted-average unit cost = $(100 units x $80 + 200 units x $82) / 250 units = $81.20 per unit.

October 30:
- 150 units sold at an average cost of $(100 units x $80 + 150 units x $82) / 250 units = $81.20 per unit.

Now we can calculate the cost of goods sold: 
- Cost of goods sold = 50 units x $80 + 150 units x $81.20 = $12,180 
- Therefore, the answer is C) $16,240 (since the beginning inventory of 100 units is already included in the calculation of weighted-average unit cost).

Lewis Company Had the Following Balances and Transactions During 2014