FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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I already solved part A, just need to correct part B.
Ending inventory for FIFO and Cost of good sold for FIFO
Transcribed Image Text:## Problem 6-02A a, b1-b2, c (Video)
Flounder Distribution markets CDs of the performing artist Fishe. At the beginning of October, Flounder had in beginning inventory 2,800 of Fishe's CDs with a unit cost of $6. During October, Flounder made the following purchases.
| Date | Quantity | Unit Cost |
|--------|----------|-----------|
| Oct. 3 | 3,500 | $7 |
| Oct. 9 | 4,900 | $8 |
| Oct. 19| 4,200 | $9 |
| Oct. 25| 5,600 | $10 |
During October, 15,260 units were sold. Flounder uses a periodic inventory system.
---
### Cost of Goods Available for Sale
**Your answer is correct.**
Determine the cost of goods available for sale.
Cost of goods available for sale: **$174,300**
---
### Weighted Average Cost Per Unit
**Your answer is correct.**
Calculate weighted average cost per unit. *(Round answer to 2 decimal places, e.g., 2.25.)*
Weighted average cost per unit: **$8.33**
---
### Ending Inventory and Cost of Goods Sold
**Your answer is partially correct. 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). Prove the accuracy of the cost of goods sold under the FIFO and LIFO methods. *(Round all calculations to 2 decimal places, e.g., 1,250. Use weighted-average unit cost rounded to 2 decimal places for computations.)*
| Method | Ending Inventory | Cost of Goods Sold |
|------------|------------------|--------------------|
| FIFO | $55,660 | $118,640 |
| LIFO | $37,380 | $136,920 |
| Average-Cost| $47,642 | $126,658 |
---
### Determination of Highest Inventory or Cost of Goods Sold
**Your answer is partially correct. Try again.**
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**
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- Match the correct pairs FOB destination and you are the buyer A. The buyer pays this amount FOB destination and you are the seller B. You pay and add to inventory costs FOB shipping point and you are the buyer C. The seller pays this FOB shipping point and you are the seller D. You pay and expense as delivery chargearrow_forwardWhen is ending inventory written down below its acquisition cost on the balance sheet? Select one: A. When units are damaged, physically deteriorated, or obsolete B. When the inventory's replacement cost exceeds its acquisition cost C. When the inventory's replacement cost is below its acquisition cost D. Both A and Carrow_forwardDuring periods of increasing costs, the use of the FIF0 method of costing inventory will result in a greater amount of net income than would result from the use of the LIFO cost method. True Falsearrow_forward
- H2arrow_forwardGoods available for sale can: Multiple Choice 4- be sold and then become Cost of Goods Sold on the income statement. not be sold and thus are not reported as Cost of Goods Sold on the balance sheet. not be sold and thus are reported as Inventory on the income statement. be sold and thus reported as Cost of Goods Sold on the balance sheet.arrow_forwardWhich of the following costs will not affect cost of goods sold? Multiple Choice Inventory inspection costs. Inventory preparation costs. Inventory-related selling costs. O Freight charges incurred to bring inventory to the warehouse.arrow_forward
- 2. Shepherd Cycles does not expect prices to change dramatically and wants to use a method that averages price changes. B. Which inventory method would best meet Shepherd's goal? Enter answer here. C. What if Shepherd wanted to expense out the newer purchases of goods instead? Which inventory would best meet that need? Enter answer here.arrow_forwardSh2arrow_forwardHelp with this problemarrow_forward
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