Calculate the cost of goods sold and the ending inventory using average weighted method.
You are given the following information for Danielle Company for the month ended June 30, 2014: Date Description Units Unit Price June 1 Beginning inventory 20 $50 4 Purchase 85 55 10 Sale (90) 18 Purchase 35 58 25 Sale (30) 26 Sales return (June 25 sale) 5 28 Purchase 15 60 Danielle Company uses a perpetual inventory system. All sales and purchases are on account. Instructions a. Calculate the cost of goods sold and the ending inventory using average weighted method. b. Assume the sales price was $90 per unit for the goods sold on June 10, and $95 per unit for the sale on June 25. Prepare journal entries to record the June 10 and 25 sale and the June 18 purchase. c. At the end of June, the company counted its inventory. There were 37 units on hand. What journal entry, if any, should the company make to record the difference? d. If the company had not discovered this shortage, what would be overstated or understated on the balance sheet and income statement and by what amount?
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