P6-6A and ending ive FIFO, LJFO, and with analysis (LO 5) P6-6A Glee Distributio

Question

P6-6A

and ending ive FIFO, LJFO, and with analysis (LO 5) P6-6A Glee Distribution markets CDs of the performing artist Unique. At the beginning of Glee had in beginning inventory 2,000 of Uniques CDs with a unit cost of $7. mine Oct. 19 3,000 @$10 Oct. 25 4,000@ $11 Oxtober Glee made the following purchases of Unique's CDs. Oct. 3 2,500 s8 Oct.9 3,500 39 During October 10,900 units were sold. Glee uses a periodic inventory system Instructions (a) Determine the cost of goods available for sale (b) Determine (1) the ending inventory and (2) the cost of goods sold under each of the tz) Cost of good assumed cost flow methods (FIFO, LIFO, and average cost). (e) Which cost flow method results in (1) the highest inventory amount for the balance Average st sheet and (2) the highest cost of goods sold for the income statement?

Explanation / Answer

Units Unit cost Total Beg inv. 2000 7 14000 3-Oct 2500 8 20000 9-Oct 3500 9 31500 19-Oct 3000 10 30000 25-Oct 4000 11 44000 Total 15000 139500 Average cost=139500/15000= $9.3 Ending inventory units=15000-10900=4100 a Cost of goods available for sale=$139500 b FIFO: Ending inventory 45000 =(4000*11)+(100*10) Cost of goods sold 94500 =139500-45000 LIFO: Ending inventory 30800 =(2000*7)+(2100*8) Cost of goods sold 108700 =139500-30800 Average cost: Ending inventory 38130 =4100*9.3 Cost of goods sold 101370 =139500-38130 c 1 FIFO results in highest inventory baalnce 2 LIFO results in highest cost of goods sold

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.