Question: Computing average cost and preparing a multi-step income statement (Learning Objectives 2 & 5) 1520 min. Refer to the data for Watkins Equipment in P5-40A.

Computing average cost and preparing a multi-step income statement

(Learning Objectives 2 & 5) 15–20 min.

Refer to the data for Watkins Equipment in P5-40A. However, assume Watkins Equipment uses the average cost method.

Requirements 1. Prepare a perpetual inventory record using average cost. Round the average unit cost to the nearest cent and all other amounts to the nearest dollar.

2. Prepare a multi-step income statement for Watkins Equipment for the month of April.

AppendixLO1

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