Jammer Company, a successful business with locations throughout the US, recently implemented a weighted average perpetual inventory system to accurately track the value of its inventory. The weighted average perpetual inventory system allows Jammer Company to assess the value of the inventory in its possession throughout the entire accounting period. This means that the inventory balance is updated each time a purchase is made, a sale is processed, or when the goods within the inventory are damaged or destroyed. By using this inventory system, Jammer Company can accurately track the value of all of its goods in possession.

What Does Jammer Company Report?

Jammer Company reports its inventory at the end of the period based on the value of the goods in its possession. This includes a weighted average cost per unit of the goods to accurately reflect the value of the inventory. This cost includes the purchase price, taxes, freight, and any other costs related to obtaining the goods. In other words, Jammer Company measures the cost of an item based on the total cost associated with the item. This system is much more accurate than a standard First In, First Out (FIFO) inventory system.

Jammer Company also reports the quantity of goods in its possession at the end of the period. This is calculated by subtracting the total quantity of goods sold from the original quantity of goods purchased. The quantity of goods on hand at the end of the period is the ending inventory balance.

Why Does Jammer Company Use A Weighted Average Perpetual Inventory System?

Jammer Company uses a weighted average perpetual inventory system because it allows the company to accurately assess the value of its inventory in real time. This system also provides Jammer Company with the most accurate value for the goods in its possession at any given time. Furthermore, this system provides valuable insight into the trends of the company’s inventory, which can help Jammer Company make savvy decisions about purchasing and selling goods.

The weighted average perpetual inventory system also allows Jammer Company to accurately report its inventory for tax purposes. This system takes into account the cost of acquiring the goods and the current value of the goods, which helps to accurately report the value of the inventory for taxation purposes. This can save Jammer Company a significant amount of money on its taxes.

Conclusion

Jammer Company’s use of a weighted average perpetual inventory system allows the company to accurately and consistently track the value of its inventory. Jammer Company is able to accurately report its inventory at the end of the period, which helps the company accurately report its inventory for taxation purposes. Through this system, Jammer Company can make informed decisions about purchasing and selling goods.