The Yarn Store Inc. inventory records showed the following data relative to a particular item sold regularly (transactions occurred in the order given):

Required:

1. Weighted average (periodic inventory system)

2. Moving weighted average (perpetual inventory system)

3. FIFO

1. Complete the following schedule (round unit costs to nearest cent and total costs of inventory to the nearest $5):

2. Prepare journal entries, including year end adjusting entries to establish ending inventory, if needed, for the two average calculations (b) and (c) above). Assume that the weighted average method is used with a periodic system and the moving weighted average method with a perpetual system.

3. Explain how your entries in (2) would be different if a standard cost system were used, with the standard cost established at $2.75 at normal capacity.

Transcribed Image Text:

Transaction Units Unit Cost 1. Beginning inventory 3,000 $2.50 2. Purchase 27,000 2,60 3. Sales (at $6.5 per unit) -10,500 4. Purchase 9,000 2.75 5. Sales (at $6.75 per unit) 6. Purchase -24,000 4,500 3.00 7. Ending inventory 9,000