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Whispering Distribution markets CDs of the performing artist King James. At the beginning of March, Whispering had in beginning inventory 1,540 King James CDs with a unit cost of €6. During March, Whispering made the following purchases of King James CDs. March 5 3,500 @ March 13 3,980 @ €7 €8 March 21 2,000 @ €10 March 26 2,000 @ €11 During March, 9,670 units were sold. Whispering 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 the two assumed cost flow methods (FIFO and average-cost). (Round average unit cost to 4 decimal places, e.g. 25.1672 and final answers to O decimal places, e.g. 2,120.) FIFO AVERAGE-COST The ending inventory € The cost of goods sold € Which cost flow method results in (1) the higher inventory amount for the statement of financial position and (2) the higher cost of goods sold for the income statement? (1) produces the higher inventory amount, € A produces the higher cost of goods sold, €

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Units Determine the cost of Goods available for sale : Date March 01. March 05. March 13. March 21. March 26. Activity Beginning Inventory Purchases Purchases Purchases Purchases per Unit Cost Total Cost 1540,00 € 6 € 9,240 3500.00 € 7 € 24,500 3980.00 € 8 € 31,840 2000,00 € 10 € 20,000 2000,00 € 11 € 22,000 Cost of Goods available for sale € 1.07.580 Determination of Ending Inventory and cost of Goods sold: Under FIFO Method : Units Working note : No of Units available Less: No of units sold No of Units in Inventory per Unit Cost Total Cost 1540,00 € 6 € 9,240 3500.00 € 7 € 24,500 3980,00 € 8 € 31,840 2000.00 € 10 € 20,000 2000,00 € 11 € 22,000 € € € Date March 01. March 05. March 13. March 21. March 26. 13,020 -9,670 3,350 Activity Beginning Inventory Purchases Purchases Purchases Purchases Cost of Goods available for sale € 1,07,580 Less : Ending Inventory of 3350 Units 2000 Units @ 11 1350 Units @ 10 € € 22,000.00 13,500.00 35,500 Cost of Goods sold 72.080 Note : Under FIFO Method, The Goods which are purchased first will be sold first Therefore, Ending Inventory Consists of goods which are purchased last Under Weighted Avg Method : Units Date March 01. March 05. March 13. March 21. March 26. Activity Beginning Inventory Purchases Purchases Purchases Purchases per Unit Cost 1540,00 € 3500.00 € 7 3980.00 € 8 2000,00 € 10 2000.00 € 11 Total Cost 9,240 € 24,500 € 31,840 € 20,000 € 22,000 € 1,07,580 Cost of Goods available for sale Weighted Avg Cost Per unit = 107580/13020 Less : Ending Inventory of 3350 Units 3350 units @ 8.2627 27,680 Cost of Goods sold 79,900 (1). (2). FIFO Produces Higher Inventory Amount Weighted Average Produces Higher Cost of goods sold 35,500 79.900 €