Chapter 6: Q33PGB_3 (page 369)

Exercise World began January with merchandise inventory of 90 crates of vitamins that cost a total of $5,850. During the month, Exercise World purchased and soldmerchandise on account as follows:
Jan. 2 Purchase 130 crates @ $ 76 each
5 Sale 140 crates @ $ 100 each
16 Purchase 170 crates @ $ 86 each
27 Sale 180 crates @ $ 104 each
Requirements
3. Prepare a perpetual inventory record, using the weighted-average inventory costingmethod, and determine the company’s cost of goods sold, ending merchandiseinventory, and gross profit. (Round weighted-average cost per unit to the nearestcent and all other amounts to the nearest dollar.)

Short Answer

Expert verified

Cost of goods sold: $24,840

Ending Inventory: $5,740

Gross Profit:$7,880

Step by step solution

Perpetual inventory table under the weighted average method

Computation of gross profit

$Total Revenue = Sale valueof 5 th Jan + Sale value of 27 th Jan = (140 \times $ 100) + (180 \times $ 104) = $ 14, 000 + $ 18720 = 32, 720 Gross Profit = Total Revenue ‐ Cost of goods sold = $ 32, 720 ‐ $ 24, 840 = $ 7, 880$

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	2019	2018	2017
Net Sales Revenue	\( 212,000	\) 161,000	\( 170,000
Cost of Goods Sold:
Beginning Merchandise Inventory	\)22,000	\(28,000	\)41,000
Net cost of purchase	131,000	100,000	86,000
Cost of goods available for sale	153,000	128,000	127,000
Less: Ending Merchandise Inventory	34,000	22,000	28,000
Cost of goods sold	119,000	106,000	99,000
Gross Profit	93,000	55,000	71,000
Operating Expenses	63,000	28,000	39,000
Net Income	\( 30,000	\) 27,000	$ 32,000

NATURE FOODS GROCERY
Income Statements
Years Ended June 30, 2019 and 2018
	2019	2018
Net Sales Revenue	\( 134,000	\) 119,000
Cost of Goods Sold:
Beginning Merchandise Inventory	\(17,000	\)14,000
Net Cost of Purchases	78,000	67,000
Cost of Goods Available for Sale	95,000	81,000
Less: Ending Merchandise Inventory	18,000	17,000
Cost of Goods Sold	77,000	64,000
Gross Profit	57,000	55,000
Operating Expenses	26,000	21,000
Net Income	\( 31,000	\) 34,000

Short Answer

Step by step solution

Perpetual inventory table under the weighted average method

Computation of gross profit

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