On December 1, LoPrice Electronics has three DVD players left in stock. All are

Question

On December 1, LoPrice Electronics has three DVD players left in stock. All are identical, all are priced to sell at $85. One of the three DVD players left in stock, with serial #1012, was purchased on June 1 at a cost of $52. Another, with serial #1045, was purchased on November 1 for $48. The last player, serial #1056, was purchased on November 30 for $40.

If LoPrice Electronics used the specific identification method instead of the FIFO method, what would LoPrice's cost of goods sold be if the company wished to minimize earnings?

Explanation / Answer

B - Using the specific identification they could claim they are selling any 2 of the three dvd players at any of the 2(out of 3) prices. If they wanted to minimize their earnings, for say tax purposes, they could use the first two reciepts of purchase(52 & 48) which gives them 100 cost of goods sold. -- IF they wanted to maximize their earnings, for say credit purposes, they could use the last two (48 & 40) which totals 100 cost of goods sold. i hope u understand

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