Lewis Company had the following balances and transactions during 2016:
$$\begin{array} { | l | l | }
\hline \text { Beginning inventory } & 140 \text { units at } \$ 84 \
\hline 10 \text { March } & \text { Sold } 70 \text { units } \
\hline 10 \text { June } & \text { Purchased } 280 \text { units at } \$ 86 \
\hline 30 \text { October } & \text { Sold } 150 \text { units } \
\hline
\end{array}$$
What would the cost of sales be as reported on the income statement for the year ending 31 December 2016 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 2016:
$$\begin{array} { | l | l | } 
\hline \text { Beginning inventory } & 140 \text { units at } \$ 84 \
\hline 10 \text { March } & \text { Sold } 70 \text { units } \
\hline 10 \text { June } & \text { Purchased } 280 \text { units at } \$ 86 \
\hline 30 \text { October } & \text { Sold } 150 \text { units } \
\hline
\end{array}$$
What would the cost of sales be as reported on the income statement for the year ending 31 December 2016 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 method, we can calculate the average cost per unit:
Average cost per unit = (Beginning inventory value + Purchases value) / (Beginning inventory units + Purchases units)
= ($1,800 + $23,180) / (50 + 230)
= $99.65 per unit

Next, we can calculate the cost of goods available for sale:
Cost of goods available for sale = Beginning inventory value + Purchases value
= $1,800 + $23,180
= $24,980

Finally, we can calculate the cost of sales:
Cost of sales = Cost of goods available for sale - Ending inventory value
= $24,980 - $6,260
= $18,720

Therefore, the answer is C - $18,720.

Lewis Company Had the Following Balances and Transactions During 2016