average, record journal entries, and calculate gross profit.

Apply perpetual FIFO and weighted average. Answer questions about results.

Video

E6.5 (LO 2) AP Top Light Company uses a perpetual inventory system. The company began 2021 with 1,000 lamps in inventory at a cost of $12 per unit. During 2021, Top Light had the following purchases and sales of lamps:

February 15

April 24

June 6

October 18

December 4

Purchased

Sold

Purchased

Sold

Purchased

2,000 units @ $18 per unit

2,500 units @ $30 per unit

3,500 units @ $23 per unit

2.000 units @ $33 per unit

1,400 units @ $26 per unit

All purchases and sales are on account.

Instructions

1. Calculate the cost of goods sold and ending inventory using weighted average. (Hint: Round the weighted average cost per unit to two decimal places.)
2. Prepare journal entries to record the June 6 purchase and the October 18 sale.
3. Calculate gross profit for the year.