Expert: Arthur Naman - 10/29/2008

Question
How should I calculate average cost during purchase return or sales return Perpetual system Average cost?

Moving Average Method

Product A/c No         101
Supplier A/c No         201
Cash   A/c No         102
Product Profit A/c No      401
Product Loss A/c No      301

Date   Trans      Rate   QTY   Amount   AverageCost   BalanceQTY   BalanceAmount
1 Jan   Begin Inventory   10.00   700   7000   10.00      700      7000
3 Jan   Purchase INV1   12.00   100   1200   10.25      800      8200
4 Jan   Sale      10.25   500   5125   10.25      300      3075
5 Jan   Purchase INV2   14.00   600   8400   12.75      900      11475
6 Jan   Purchase INV3   15.00   200   3000   13.16      1100      14475
7 Jan   Return INV1   10.00   700   7000   ??.??      400      ??????
8 Jan   Sale      ??.??   200   ????   ??.??      200      ??????
9 Jan   Return INV2   ??.??   50   ????   ??.??      150      ??????
10Jan   Return INV3   ??.??   150   ????   ??.??      0      0

Please explain me , how should I calculate average cost under “Moving Average Cost Method” inventory system?

Answer
This is not the forum for homework questions, please do your homework.

The answer is: search using google or other search engine for the terms you are looking for and find how to do the calculation.

Once you have found the method explained, if you then have a specific question, please ask that specific question.

Thanks.

p.s. See if you can find it by searching for past answers on allexperts as I have already explained this method.