Business, 14.06.2021 15:50 AutumnJoy12

The following information was available from the inventory records of Rich Company for January: Units Unit Cost Total Cost
Balance at January 1 9,000 $9.77 $87,930
Purchases:
January 6 6,000 10.30 61,800
January 26 8,100 10.71 86,751
Sales:
January 7 (7,500)
January 31 (11,100)
Balance at January 31 4,500
A. Assuming that Rich does not maintain perpetual inventory records, what should be the inventory at January 31, using the weighted-average inventory method, rounded to the nearest dollar?
a. $47,270.
b. $46,067.
c. $46,170.
d. $46,620.
B. Assuming that Rich maintains perpetual inventory records, what should be the inventory at January 31, using the moving-average inventory method, rounded to the nearest dollar?
a. $47,270.
b. $46,067.
c. $46,170.
d. $46,620.
Please EXPLAIN answer for a thumps-up. I'm tried of wrong answers, please don't answer it unless you are 100% sure.

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Answer from: sophiateaches053

A. The correct option is b. $46,067.

B. The correct option is d. $46,620.

Explanation:

Note: The data in this question are merged together. They are therefore sorted before answering the question. See the attached pdf file for the complete question with the sorted data.

The explanation of the answers is now given as follows:

A. Assuming that Rich does not maintain perpetual inventory records, what should be the inventory at January 31, using the weighted-average inventory method, rounded to the nearest dollar?

Note: See part A of the attached excel file for the calculation of the of units and cost of goods available for sale.

Since Rich does not maintain perpetual inventory records, this implies that this is a periodic inventory system. And update to inventory in a periodic inventory system are made on a regular basis, such as monthly, quarterly, etc.

From the part A attached excel file, we have:

Units of goods available for sale = 23,100

Cost of goods available for sales = $236,481

Weighted-average cost per unit = Cost of goods available for sales / Units of goods available for sale = $236,481 / 23,100 = $10.2372727272727

Inventory at January 31 = Units of inventory balance at January 31 * Weighted-average cost per unit = 4,500 * $10.2372727272727 = $46,068

From the options the closest one is b. $46,067. Therefore, the inventory at January 31 is $46,067 and the correct option is b. $46,067.

B. Assuming that Rich maintains perpetual inventory records, what should be the inventory at January 31, using the moving-average inventory method, rounded to the nearest dollar?

Note: See part B of the attached excel file for the calculation of the inventory at January 31 (in bold red color).

Under Perpetual Inventory system, the inventory is updated whenever a purchase or sale is made. It's a procedure that happens in real time.

In the Part B of the attached excel file, the following rates in light red color are made as follows:

Rate on January 6 = ($87,930 + $61,800) / 15,000 = $9.98 per unit

Rate on January 26 = ($74,865 + 86,751) / 15,600 = $10.36 per unit

From the part B attached excel file, we have:

Inventory at January 31 = $46,620.

Therefore, the correct option is d. $46,620.

Answer from: Quest

15 pounds of apples and 6 cups of flour

Answer from: Quest

one of the appeals of a sole proprietorship is that business expenses are kept separate from your personal income tax return

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