ACCA FA2 VALUE OF SALES 2

At 1 January 20X3 Wasan had 100 units of a particular item in inventory. These were valued at $500 per unit. During January, the purchase and sales of the item were:

Date Units Price per unit Sales (units)
5 Jan 50
10 Jan 300 450
17 Jan 300
22 Jan 600 405
28 Jan 600

Wasan values inventory on the periodic weighted average basis.

What is the value of Wasan's inventory at 31 January 20X3 (to the nearest $1)?

ACCA FA2 VALUE OF SALES 2

Suggested Solution.

No of units available for sales

= 100 + 300 +600

=1000

No of units sold during the month

=50 +300 +600

=950

No of units at the end of the month

= 1000 -950

=50 Units

Periodic weighted average rate computation

Date Units Price per unit Value
1 Jan 100 500 50,000
10 Jan 300 450 135,000
22 Jan 600 405 243,000
Total 1,000 428,000
Unit price 428
Month end Unit 50
Inventory Value 21,400

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