Question: Amazon.com, Inc. uses the weighted-average method for inventory valuation. The following information is available for the year ending December 31, 2023: Beginning inventory: 4,000 units

Amazon.com, Inc. uses the weighted-average method for inventory valuation. The following information is available for the year ending December 31, 2023:

  • Beginning inventory: 4,000 units @ $25 each
  • Purchases: 10,000 units @ $28 each
  • Sales: 12,000 units @ $50 each

Required:

  1. Calculate the cost of goods sold (COGS).
  2. Determine the ending inventory value.
  3. Prepare the journal entries for inventory purchases and sales.
  4. Discuss the impact of the weighted-average method on financial statements.

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