Koontz Company uses the perpetual inventory method and the weighted-average method.On January 1,Year 1,the company's first day of operations,Koontz purchased 400 units of inventory that cost $7.50 each.On January 10,Year 1,the company purchased an additional 600 units of inventory that cost $9.00 each.If the company sells 550 units of inventory,what is the amount of inventory that would appear on the balance sheet immediately following the sale?

Question

Quizplus · Accepted Answer

Ending inventory units = 400 units + 600 units - 550 units sold = 450
Average cost per unit = Total cost of the inventory available ÷ Total number of units available
Average cost per unit = [(400 × $7.50)+ (600 × $9.00)] ÷ 1,000 = $8.40 per unit
Cost of goods sold = Average cost per unit × Number of units sold
Cost of goods sold = $8.40 per unit × 450 units = $3,780

Koontz Company Uses the Perpetual Inventory Method and the Weighted-Average