Reference no: EM133018362

Question - S. Claus Company makes toys and gifts. At the beginning of July, it owned 400 gallons of red paint, which were recorded on the balance sheet at $4.40 per gallon.

The following events occurred in the next quarter.

1. Purchased 700 gallons on July 1 at $4.25 each.

2. Purchased 200 gallons on August 1 at $4.50 each.

3. Purchased 1000 gallons during September at $4.95 each.

4. Used 1,500 gallons during July through September (250 gallons - 9th July, 600 gallons - 30th August, 650 gallons - 06th September).

All the purchases were made at 1st date of the month.

Required - Calculate the inventory balance at the end of September and the cost of goods sold during these three months, using WACO accounting (at the date of each transaction).