Knowledge Check 01
Intercontinental, Incorporated, uses a perpetual inventory system. Consider the following information about its inventory: August 1 ,
purchased 10 units for or per unit, August 3 , purchased 15 units for or per unit; August 14 , sold 20 units; August
17 , purchased 20 units for or per unit, August 28 , purchased 10 units for or per unit, August 30 , sold 23 units.
ook sk Using weighted average, the cost of goods sold for the sale of 23 units on August 30 is___ and the inventory balance at August 30
is

Ask by Matthews Mcdonald. in the United States

Mar 26,2025

Question

Knowledge Check 01
Intercontinental, Incorporated, uses a perpetual inventory system. Consider the following information about its inventory: August 1 ,
purchased 10 units for or per unit, August 3 , purchased 15 units for or per unit; August 14 , sold 20 units; August
17 , purchased 20 units for or per unit, August 28 , purchased 10 units for or per unit, August 30 , sold 23 units.
ook sk Using weighted average, the cost of goods sold for the sale of 23 units on August 30 is___ and the inventory balance at August 30
is

Ask by Matthews Mcdonald. in the United States

Mar 26,2025

UpStudy AI · Accepted Answer

1. **August 1 – Purchase:**  
   Purchased $$10$$ units for $$\$910$$.  
   Weighted average cost per unit:  
   $$
   \text{Average Cost} = \frac{910}{10} = 91.
   $$

2. **August 3 – Purchase:**  
   Purchased $$15$$ units for $$\$1,590$$.  
   Total units after purchase:  
   $$
   10 + 15 = 25 \text{ units.}
   $$  
   Total cost:  
   $$
   910 + 1590 = 2500.
   $$  
   New weighted average cost per unit:  
   $$
   \frac{2500}{25} = 100.
   $$

3. **August 14 – Sale:**  
   Sold $$20$$ units at the weighted average cost of $$\$100$$ per unit.  
   Cost of goods sold (COGS) for this sale:  
   $$
   20 \times 100 = 2000.
   $$  
   Units remaining after sale:  
   $$
   25 - 20 = 5 \text{ units.}
   $$  
   Remaining inventory cost:  
   $$
   2500 - 2000 = 500.
   $$

4. **August 17 – Purchase:**  
   Purchased $$20$$ units for $$\$2,300$$ (i.e., $$ \$115 $$ per unit).  
   Total units after purchase:  
   $$
   5 + 20 = 25 \text{ units.}
   $$  
   Total cost after purchase:  
   $$
   500 + 2300 = 2800.
   $$  
   New weighted average cost per unit:  
   $$
   \frac{2800}{25} = 112.
   $$

5. **August 28 – Purchase:**  
   Purchased $$10$$ units for $$\$1,190$$ (i.e., $$ \$119 $$ per unit).  
   Total units after purchase:  
   $$
   25 + 10 = 35 \text{ units.}
   $$  
   Total cost after purchase:  
   $$
   2800 + 1190 = 3990.
   $$  
   New weighted average cost per unit:  
   $$
   \frac{3990}{35} = 114.
   $$

6. **August 30 – Sale:**  
   Sold $$23$$ units using the weighted average cost of $$\$114$$ per unit.  
   Cost of goods sold (COGS) for this sale:  
   $$
   23 \times 114 = 2622.
   $$  
   Units remaining after sale:  
   $$
   35 - 23 = 12 \text{ units.}
   $$  
   Ending inventory balance:  
   $$
   12 \times 114 = 1368.
   $$

**Answer:**  
- Cost of goods sold for the sale of 23 units on August 30: $$\$2622$$.  
- Inventory balance at August 30: $$\$1368$$.
- **Cost of goods sold for the sale of 23 units on August 30:** \$2,622 - **Inventory balance at August 30:** \$1,368

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