A company uses the periodic inventory system and had the following activity during the current...

Question:

A company uses the periodic inventory system and had the following activity during the current monthly period.

November 1: Beginning inventory of113 Units @ $10
November 5: Purchased113 Units a $26
November 8: Purchased63 Units a $25
November 16: Sold178 Units $110
November 19: Purchased80 Units $20

Using the weighted-average inventory method, the company's ending inventory would be:

a. $2.730

b. $3,175

c. $3,749

d. $1.130

e. $4.305

What Is A Periodic Inventory System:

Companies generally must choose between the implementation of a Perpetual or Periodic Inventory System. A Periodic Inventory System implies that the company does not make journal entries after each purchase or sale but generally at the end of the period.

Answer and Explanation: 1

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The weighted average cost for all purchases and beginning inventory is: Total price paid / number of total units purchased or on hand

=(113*10+113*26...

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Periodic Inventory System: Definition, Advantages & Examples

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Chapter 1 / Lesson 14
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Explore the periodic inventory system. Learn the definition of the periodic inventory system and understand its advantages. See periodic inventory system examples.


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