Problem 6-03A a, b1-b2, c (Video) Coronado Company had a beginning inventory on
ID: 2436694 • Letter: P
Question
Problem 6-03A a, b1-b2, c (Video) Coronado Company had a beginning inventory on January 1 of 190 units of Product 4-18-15 at a cost of $20 per unit. During the year, the following purchases were made Mar. 15 450 units at $23 Sept. 4 350 units a $25 uly 20 230 units a $24Dec. 2 100 units at $26 1,115 units were sold. Coronado Company uses a periodic inventory system Determine the cost of goods available for sale The cost of goods available for sale Calculate average cost per unit. (Round answer to 3 decimal places, e.g. 1.250.) 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) (Round answers to 0 decimal places, e.g. 1,250.) LIFO AVERAGE-COST The ending inventory s 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? results in the highest inventory amount, $ produces the highest cost of goods sold, $ Click if you would like to Show Work for this question: Open Show workExplanation / Answer
The cost of goods available for sale: $31020
Average cost per unit: $23.500
1. FIFO results in the highest inventory amount, $5225
2. LIFO produces the highest cost of goods sold, $26875
Working:
Average cost per unit: $31020/1320 = $23.500
FIFO:
The ending inventory = (100 x $26) + (105 x $25) = $2600 + $2625 = $5225
The cost of goods sold = $31020 - $5225 = $25795
LIFO:
The ending inventory = (190 x $20) + (15 x $23) = $3800 + $345 = $4145
The cost of goods sold = $31020 - $4145 = $26875
AVERAGE-COST:
The ending inventory = 205 x $23.500 = $4817.50 = $4818
The cost of goods sold = $31020 - $4818 = $26202
FIFO LIFO AVERAGE-COST The ending inventory $ 5,225 $ 4,145 $ 4,818 The cost of goods sold $ 25,795 $ 26,875 $ 26,202