Berring Sales uses the average-cost method. The partially completed inventory record for January appears below. On January 14, the company sold 10 units. On January 29, the company sold 50 units. Complete the inventory record through the January 14 sale, and calculate the Inventory balance after the January 14 sale. (Please round to the nearest whole dollar.)

Question

Berring Sales uses the average-cost method. The partially completed inventory record for January appears below.  On January 14, the company sold 10 units. On January 29, the company sold 50 units. Complete the inventory record through the January 14 sale, and calculate the Inventory balance after the January 14 sale. (Please round to the nearest whole dollar.)

Quizplus · Accepted Answer

Using the average-cost method, the cost of goods sold and the ending inventory are calculated based on the average cost of all inventory items.

To complete the inventory record:

- The cost of goods available for sale is $1,150 (100 units x $11.50).
- The total quantity of goods sold is 10 + 50 = 60 units.
- The cost of goods sold for the January 14 sale is 10 units x $11.50 = $115.
- The weighted average cost per unit is ($1,150 - $115) / 90 units = $11.28.
- The cost of goods sold for the January 29 sale is 50 units x $11.28 = $564.
- The ending inventory balance as of January 29 is 40 units x $11.28 = $451.20.

Therefore, the inventory balance after the January 14 sale is 90 units x $11.28 = $1,015.20 - $115 = $900.20, which rounds to $228.

Berring Sales Uses the Average-Cost Method