Valix Finacc vol 1 Problem 7-25

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 7-25

1.  Cost of units available for sale for July                                                              1,452,100

      Purchases for July                                                                                            (1,042,100)

      Cost of inventory – July 1                                                                                    410,000

       Number of units – July 1 (410,000 / P4)                                                               102,500

2.   July 1 inventory                                                                                                    102,500

      Purchases for July                                                                                                200,000

      Total units available for sale for July                                                                   302,500

      July 31 inventory                                                                                                (  60,000) 

      Units sold during the month of July                                                                     242,500

3.  Average unit cost (1,452,100 / 302,500)                                                                      4.80

     Inventory – July 31 (60,000 x 4.80)                                                                          288,000

     Another computation (1,452,100 – 1,164,100)                                                      288,000