FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Concord Distribution markets CDs of the performing artist Fishe. At the beginning of October, Concord had in beginning inventory 2,500 of Fishe’s CDs with a unit cost of $7. During October, Concord made the following purchases of Fishe’s CDs.

Oct. 3   3,125  @  $8   Oct. 19   3,750  @  $10
Oct. 9   4,375  @  $9   Oct. 25   5,000  @  $11

During October, 13,625 units were sold. Concord uses a periodic inventory system.
 
 
Determine the cost of goods available for sale.

Cost of goods available for sale  

Calculate weighted average cost per unit. (Round answer to 2 decimal places, e.g. 2.25.)

Weighted average cost per unit  
?

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). Prove the accuracy of the cost of goods sold under the FIFO and LIFO methods. (Round answers to 0 decimal places, e.g. 1,250. Use weighted-average unit cost rounded to 2 decimal places for computations.)

   
FIFO
 
LIFO
 
AVERAGE-COST
The ending inventory  
 
 
The cost of goods sold  
 
 

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?

(1)   (FIFO, LIFO, or Average-cost) results in the highest inventory amount, $ ?
(2)   (FIFO, LIFO, or Average-cost) results in the highest cost of goods sold, $ ?
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