Page 52 - Accountancy_F5

Cost of sales will be:
TZS

Total purchases 8,320,000
Less: Closing inventory (870,000)
Cost of sales 7,450,000
th FOR ONLINE READING ONLY

(c) Weighted average method under the perpetual inventory-taking system
In a perpetual system, the weighted average cost is recalculated with each new purchase.
This continuous recalculation yields a moving average cost, which adjusts with every
new inventory purchase. Consequently, to address Example 2.3 using WAM, the value
LANGUAGE EDITING
of the closing inventory can be determined as follows:

Inventory valuation sheet for door carpets

Date PURCHASED SOLD BALANCE
2023 Units Unit Total cost Units Unit Total cost Units Unit Total cost
cost cost cost
TZS TZS TZS TZS TZS TZS
5 Jan. 120 6,000 720,000 120 6,000.00 720,000
th
120
-
6,000
10 Feb. LANGUAGE EDITING -
-
720,000
th
28 Mar. 280 6,200 1,736,000 280 6,200.00 1,736,000
th
3 Apr. 160 6,200 992,000 120 6,200.00 744,000
rd
10 Apr. 160 6,300 1,008,000 160 6,300 .00 1,008,000
th
280 6,257.14 1,752,000
20 May 80 6,257 500,571 200 6,257.15 1,251,429
th
30 Jun. 240 6,400 1,536,000 240 6,400.00 1,536,000
th
440 6,335.07 2,787,429
10 Jul. 200 6,335 1,267,014 240 6,335.06 1,520,415
th
4 Aug. 100 6,335 633,507 140 6,335.06 886,908
th
28 Aug. 400 6,600 2,640,000 400 6,600.00 2,640,000
th
540 6,531.31 3,526,908
nd
02 Sept. 220 6,531.3 1,436,888 320 6,531.31 2,090,020
10 Nov. 100 6,800 680,000 320 6,531.31 2,090,020
100 6,800.00 680,000
420 6,595.28 2,770,020
th
20 Dec. 280 6,595.3 1,846,678 140 6,595.30 923,342
1300 8,320,000 1160 7,396,658 140 6,595.30 923,342

Student’s Book Form Five
39

23/06/2024 17:34
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ACCOUNTANCY_DUMMY_23 JUNE.indd 39