Question

Problem 6-02A Marigold Corp. markets CDs of numerous performing artists. At the beginning of March, Marigold had in beginning inventory 2,700 CDs with a unit cost of $7. During March, Marigold made the following purchases of CDs. March 5 March 13 1,900 3,500 @ @ $8 $9 March 21 March 26 5,000 1,900 @ @ $10 $11 During March 12,000 units were sold. Marigold uses a periodic inventory system. Your answer is correct. Determine the cost of goods available for sale. The cost of goods available for sale $ 136500 Calculate Average Cost. (Round answer to 3 decimal places, e.g. 5.125.) Average Cost 9.1 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO VIDEO x 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

Answer 1

Solution:

Computation of COGS and ending inventory - Periodic FIFO
Particulars	Cost of goods available for sale			Cost of goods sold			Ending Inventory
	Nos of units	Unit Cost	Cost of goods available for sale	Nos of units sold	Unit Cost	Cost of goods sold	Nos of units in ending inventory	Unit Cost	Ending inventory
Beginning inventory	2700	$7.00	$18,900	2700	$7.00	$18,900.00	0	$7.00	$0.00
Purchases:
5-Mar	1900	$8.00	$15,200	1900	$8.00	$15,200.00	0	$8.00	$0.00
13-Mar	3500	$9.00	$31,500	3500	$9.00	$31,500.00	0	$9.00	$0.00
21-Mar	5000	$10.00	$50,000	3900	$10.00	$39,000.00	1100	$10.00	$11,000.00
26-Mar	1900	$11.00	$20,900	0	$11.00	$0.00	1900	$11.00	$20,900.00
Total	15000		$136,500	12000		$104,600.00	3000		$31,900.00

Computation of COGS and ending inventory - Periodic LIFO
Particulars	Cost of goods available for sale			Cost of goods sold			Ending Inventory
	Nos of units	Unit Cost	Cost of goods available for sale	Nos of units sold	Unit Cost	Cost of goods sold	Nos of units in ending inventory	Unit Cost	Ending inventory
Beginning inventory	2700	$7.00	$18,900	0	$7.00	$0.00	2700	$7.00	$18,900.00
Purchases:
5-Mar	1900	$8.00	$15,200	1600	$8.00	$12,800.00	300	$8.00	$2,400.00
13-Mar	3500	$9.00	$31,500	3500	$9.00	$31,500.00	0	$9.00	$0.00
21-Mar	5000	$10.00	$50,000	5000	$10.00	$50,000.00	0	$10.00	$0.00
26-Mar	1900	$11.00	$20,900	1900	$11.00	$20,900.00	0	$11.00	$0.00
Total	15000		$136,500	12000		$115,200.00	3000		$21,300.00

Computation of COGS and ending inventory - Periodic Weighted Average cost method
Particulars	Cost of goods available for sale			Cost of goods sold - Average cost			Ending Inventory - Average cost
	Nos of units	Unit Cost	Cost of goods available for sale	Nos of units sold	Unit Cost	Cost of goods sold	Nos of units in ending inventory	Unit Cost	Ending inventory
Beginning inventory	2700	$7.00	$18,900
Purchases:
5-Mar	1900	$8.00	$15,200
13-Mar	3500	$9.00	$31,500
21-Mar	5000	$10.00	$50,000
26-Mar	1900	$11.00	$20,900
Total	15000	$9.10	$136,500	12000	$9.10	$109,200	3000	$9.10	$27,300