Question

--W011 X 3 WileyPLUS X + en.wileyplus.com/edugen/student/mainfr.uni C- Problem 6-3 Novak Distribution markets CDs of numerous performing artists. At the beginning of March, Novak had in beginning inventory 2,580 CDs with a unit cost of $7. During March, Novak made the following purchases of CDs. March 5 March 13 1,910 3,230 @ $8 @ $9 March 21 March 26 5,070 2,040 @ $10 @ $11 During March 11,530 units were sold. Novak uses a periodic inventory system. Determine the cost of goods available for sale. The cost of goods available for sale $ 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). (For calculation purposes, round average cost to 3 decimal places, ... 5.275. Round answers to o decimal places, e.g. 125.) FIFO LIFO AVERAGE COST The ending inventory s The cost of goods sold S $ $ Which cost flow method results in (1) the highest inventory amount for the balance sheet and (2) the highest cost of goods sold for the income statement Reserved

Answer 1

	Cost of goods available for sale
DATE	UNITS	RATE	AMOUNT $
Beg. Bal	2580	7	18060
Purchasse
05-Mar	1910	8	15280
13-Mar	3230	9	29070
21-Mar	5070	10	50700
26-Mar	2040	11	22440
TOTAL	14830		135550
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC FIFO METHOD
	RECIEPTS	COST OF GOODS SOLD	BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
Beg. Bal	2580	7	18060	2580	7	18060
Purchasse
05-Mar	1910	8	15280	1910	8	15280
13-Mar	3230	9	29070	3230	9	29070
21-Mar	5070	10	50700	3810	10	38100	1260	10	12600
26-Mar	2040	11	22440				2040	11	22440
TOTAL	14830		135550	11530		100510	3300		35040
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC LIFO METHOD
	RECIEPTS	COST OF GOODS SOLD	BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
Beg. Bal	2580	7	18060				2580	7	18060
Purchasse
05-Mar	1910	8	15280	1190	8	9520	720	8	5760
13-Mar	3230	9	29070	3230	9	29070
21-Mar	5070	10	50700	5070	10	50700
26-Mar	2040	11	22440	2040	11	22440
TOTAL	14830		135550	11530		111730	3300		23820
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC WEIGHTED AVERAGE METHOD
	RECIEPTS	COST OF GOODS SOLD	BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
Beg. Bal	2580	7	18060
Purchasse
05-Mar	1910	8	15280
13-Mar	3230	9	29070
21-Mar	5070	10	50700
26-Mar	2040	11	22440
TOTAL	14830	9.14	135550	11530	9.14	105384	3300	9.14	30166
			FIFO	LIFO	Average
Ending Inventory		35040	23820	30166
Cost of goodssold		100510	111730	111730
FIFO produces highest ending inventory
LIFO produces highest cost of goods sold