Kimmel, Financial Accounting, 8e, Custom for University of Akron Help I S CALCUL

Question

Kimmel, Financial Accounting, 8e, Custom for University of Akron Help I S CALCULATOR PIINTER VERSION | | BACK CES Problem 6-2A (Part Level Submission) Peart Industries markets CDs of numerous performing artists. At the beginning of March, Pearl Industries had in beginning inventory 2,460 CDs with a unit cost of $7. During March, Pearl Industries made the following purchases of CDs March 5 2,120 $8 March 21 4,700 $10 March 13 3,450 $9 March 26 2,020 $11 dy During March 11,390 units were sold. Pearl Industries uses a periodic inventory system. (a) Your answer is correct. (a) Determine the cost of goods available for sale. The cost of goods available for sale (b) Calculate Average Cost. (Round answer to 3 decimal places, e.g. 5.125. Average Cost 9-11 SHOW LIST OF ACCOUNTS SHOW SOLUTION SHOW ANSWER LINK TO TEXT VIDEO: S IMIL PROBLE Attempts: 2 of 2 used (b) Your answer is incorrect. Try again. Determine (1) the ending inventory and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost). (Round answers to 0 decimal places, e.g. 125.) FIFO LIFO AVERAGE-COST The ending inventory The cost of goods sold SHOW LIST OF ACCOUNTS e to search

Explanation / Answer

SOLUTION

1. A.

1B. Average cost = $134,450 / 14,750 = $9.115

2. Units in ending inventory = 14,750 - 11,390 = 3,360

FIFO Method-

Ending Inventory - (2,020 * $11) + (1,340 * $10) = $35,620

COGS- $134,450 - $35,620 = $98,830

LIFO Method-

Ending Inventory - (2,460 * $7) + (900 * $8) = $24,420

COGS- $134,450 - $24,420 = $110,030

Average cost-

Ending inventory - 3,360 * $9.115 = $30,626

COGS- $134,450 - $30,626 = $103,824

Units Amount per unit ($) Total Amount ($) Beginning inventory 2,460 7 17,220 Purchases: March 5 2,120 8 16,960 March 13 3,450 9 31,050 March 21 4,700 10 47,000 March 26 2,020 11 22,220 Cost of goods sold 14,750 134,450

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