Refer to the data for E6-1 A. However, instead of the FIFO method, assume Austin’s Jewelers uses the average cost method.
1. Prepare a perpetual inventory record for the watches on the average cost basis to determine the cost of ending inventory and cost of goods sold for the month. Round average cost per unit to the nearest cent and all other amounts to the nearest dollar.
2. Journalize Austin’s Jewelers’ inventory transactions using the perpetual average cost method. Assume that all purchases and sales are on account.