You are given the following information for Swan Valley Company for the month ended June 30, 2024:

Swan Valley Company uses a perpetual inventory system. All sales and purchases are on account.

Instructions
a. Calculate the cost of goods sold and the ending inventory using weighted average. Round the weighted average cost per unit to two decimal places.
b. Assume the sales price was $90 per unit for the goods sold on June 10, and $95 per unit for the sale on June 25. Prepare journal entries to record the June 10 sale and the June 18 purchase.
c. At the end of June, the company counted its inventory. There were 32 units on hand. What journal entry, if any, should the company make to record the difference?
d. If the company had not discovered this shortage, what would be overstated or understated on the balance sheet and income statement and by what amount?

Taking It Further

In what respects does weighted average provide more useful information than FIFO?

Transcribed Image Text:

Date June 1 4 10 18 25 28 Description Beginning inventory Purchase Sale Purchase Sale Purchase Units 20 85 (90) 35 (30) 15 Unit Price $50 55 58 60