Ralwins, Inc. had the following balances and transactions during 2018, from January 1 to December...
Question:
Ralwins, Inc. had the following balances and transactions during 2018, from January 1 to December 31:
| Beginning merchandise inventory | 200 units at $81 |
| March 10 | Sold 100 units |
| June 10 | Purchased 400 units at $83 |
| October 30 | Sold 300 units |
What would be reported for ending merchandise inventory on the balance sheet at December 31, 2018, if the perpetual inventory system and the weighted average inventory costing method are used? (Round unit costs to two decimal places and total costs to the nearest dollar.)
A. {eq}\$16,200 {/eq}.
B. {eq}\$8,100 {/eq}.
C. {eq}\$24,300 {/eq}.
D. {eq}\$16,520 {/eq}.
Perpetual Inventory System:
The perpetual inventory system differs from the periodic system because the Cost of Goods Sold expense is recorded for each sales transaction, and calculated at the end of the period. This means that the weighted average cost per unit must be updated after each transaction.
Answer and Explanation: 1
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The correct option is D.
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Perpetual Inventory System: Definition, Advantages & Examples
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Chapter 1 / Lesson 15
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Perpetual inventory systems are used by businesses to monitor their inventories in real-time with the use of radio frequency identification, barcodes, point of sales, and other technological systems. Learn about the definition of a perpetual inventory system, the advantages of using this system, and some examples of perpetual inventory systems.
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