Average Cost (AVCO) Method

sathishmadhav

Dear All

I have a question on Average Cost (AVCO) Method.


Item X has following ledger entries.

January 1st Beginning Inventory 2 units @ $1000.00 per unit ie. amout $2000
June 30th Consumed 2 units @ $1000.00 per unit ie. amout $2000.

December 31st Purchase 2 units @ $100,000.00 per unit ie. amout $200,000

No further consumption entries posted after 31st December.

Question: What should be the decreases amount & closing inventory amount in inventory valuation report.

qty amount
Beginning inventory 2 $2,000
Increases 2 $200,000
Decreases 2 ??
Closing Inventory 2 ??



Thanks
satish