Economics · Inventory Valuation
A business uses the continuous (perpetual) weighted average cost method for inventory valuation. On 1 May, it had an opening inventory of 100 units at $10 each. The following transactions occurred: 4 May: Purchased 200 units at $13 each. 10 May: Sold 150 units for $25 each. 15 May: The owner took 10 units for personal use. What is the value of the closing inventory after these transactions and the correct journal entry to record the owner's drawings?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Value: $1,680; Debit Drawings $120, Credit Inventory $120✓
- 2Value: $1,680; Debit Drawings $250, Credit Sales $250
- 3Value: $1,500; Debit Drawings $100, Credit Purchases $100
- 4Value: $1,560; Debit Drawings $120, Credit Purchases $120
Correct answer
Value: $1,680; Debit Drawings $120, Credit Inventory $120
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