Average cost (Learning Objective 2) 10–15 min.

Refer to the data for E5-16A. However, instead of the FIFO method, assume Riley’s Sports Shop uses the average cost method.

Requirements 1. Prepare a perpetual inventory record for the cameras on the average cost basis to determine the cost of ending inventory and cost of goods sold for the month.

Round average cost per unit to the nearest cent and all other amounts to the nearest dollar.

2. Journalize Riley’s Sports Shop’s inventory transactions using the perpetual average cost method. Assume that all purchases and sales are on account.

AppendixLO1