Clear Sound Audio uses a periodic inventory system. One of the store’s most popu

Question

Clear Sound Audio uses a periodic inventory system. One of the store’s most popular products is an MP8 car stereo system. The inventory quantities, purchases, and sales of this product for the most recent year are as follows: Number of Units Cost per Unit Total Cost Inventory, Jan. 1 12 $ 299 $ 3,588 First purchase (May 12) 15 306 4,590 Second purchase (July 9) 21 308 6,468 Third purchase (Oct. 4) 8 315 2,520 Fourth purchase (Dec. 18) 17 320 5,440 Goods available for sale 73 $ 22,606 Units sold during the year 51 Inventory, Dec. 31 22 Instructions a. Using periodic costing procedures, compute the cost of the December 31 inventory and the cost of goods sold for the MP8 systems during the year under each of the following cost flow assumptions: (Round your unit cost values to 2 decimal places and final answers to the nearest whole dollar amount.)

Explanation / Answer

FIFO

Total goods 73 -sold 51 = 22 ending inventory

Total                                                                              $15,591

LIFO

Average inventory

Average cost = 22606/73 = $309.6712328

Ending inventory = 22 @309.6712328 = $6813

COGS                   = 51@ 309.6712328 = $15,793

Ending 17 @320 $5440 5@315 $1575 total ending $$7015 COGS 12@299 $3588 15@306 4590 21@308 6468 3@315 945

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