Stephens Inc. is a wholesaler of photography equipment. The activity for the VTC cameras during July is shown below:

See information for Stephens Inc. above. If Stephens Inc. uses a moving average perpetual inventory system, the ending inventory of the VTC cameras at July 31 is reported as

Question

Stephens Inc. is a wholesaler of photography equipment. The activity for the VTC cameras during July is shown below:

See information for Stephens Inc. above. If Stephens Inc. uses a moving average perpetual inventory system, the ending inventory of the VTC cameras at July 31 is reported as

Quizplus · Accepted Answer

Using a moving average perpetual inventory system, the ending inventory cost is calculated by taking the average cost of all units purchased during the period. In this case, the total cost of all units purchased during July is $475,200. Dividing this by the total number of units purchased (3,000) gives an average cost of $158.736 per unit. To determine ending inventory, we need to calculate the cost of the units remaining in inventory. Based on the activity for July, 1,000 units were sold and 1,200 units were purchased, leaving 2,200 units on hand. Multiplying the number of units remaining in inventory (2,200) by the average cost per unit ($158.736) gives an ending inventory value of $349,219. Rounded to the nearest hundred, this gives an ending inventory of $158,736.