Refer to the Toy World situation in Problem 6-29A. Keep all the data unchanged, except that Toy World now uses the average-cost method.

Requirements 

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

2. Prepare a multi-step income statement for Toy World for the month ended January 31, 2007.

Problem 6-29A

Toy World began January with an inventory of 20 crates of toys that cost a total of $1,100. During the month, Toy World purchased and sold merchandise on account as follows:

Cash payments on account totaled \(\$ 6,300\). Operating expenses for the month were \(\$ 3,600\), with two-thirds paid in cash and the rest accrued as Accounts Payable.

Transcribed Image Text:

Purchase 1 30 crates @ $65 Sale 1 Purchase 2 70 crates @ $70 75 crates @ sale price of $110 40 crates @sale price of $100 Sale 2