Problem 6-02A a, b1-b2, c (Video) Concord Distribution markets CDs of the perfor
ID: 2436693 • Letter: P
Question
Problem 6-02A a, b1-b2, c (Video) Concord Distribution markets CDs of the performing artist Unique. At the beginning of October, Concord had in beginning inventory 2,000 of Unique's CDs with a unit cost of $7. During October, Concord made the following purchases of Unique's CDs Oct. 3 2,500$8 Oct. 19 3,000$10 Oct.9 3,500 $9 Oct. 25 4,000$11 During October, 10,800 units were sold. Concord uses a periodic inventory system Determine the cost of goods available for sale Cost of goods available for sales Calculate cost per unit. (Round answer to 2 decimal places, e.g 2.25.) 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) (Round answers to 0 decimal places, e.g. 1,250.) FIFO LIFO 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? produces the highest inventory amount, $ produces the highest cost of goods sold, $Explanation / Answer
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1 Units Rate Amount Beginning Inventory 2000 $ 7 $ 14,000 Oct 3 2500 $ 8 $ 20,000 Oct 9 3500 $ 9 $ 31,500 Oct 19 3000 $ 10 $ 30,000 Oct 25 4000 $ 11 $ 44,000 Cost of goods available for sell 15000 $ 9.30 $ 139,500 Units sold 10800 Ending inventory units 4200 2 Cost Per Unit $9.30 See above table FIFO LIFO AVERAGE-COST 3 The ending inventory $ 46,000 $ 31,600 $ 39,060 The cost of goods sold $ 93,500 $ 107,900 $ 100,440 The ending inventory 4000*11+200*10 = 46000 2000*7+2200*8= 31600 4200*9.3 = 39060 The cost of goods sold 139500-46000 = 93500 139500-31600 10800*9.3 = 100440 4(1) FIFO produces the highest inventory amount, $46000 LIFO produces the highest cost of goods sold, $107,900