Question

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.

(a)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

$

(b2)

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		$		$		$

Answer 1

2500 Periodic : FIFO Goods Purchasd Cost of Goods Sold Inventory Balance cost of Goods # of Units Cost Per Cost of Cost Per Ending # of Units Cost Per Unit Available for sales sold Unit Goods Sold # of Units Unit Inventory Beginning inventory 25001 17500 17500 Purchases Oct-03 31251 25000 3125 25000 Oct-09 4375 39375 4375 39375 Oct-19 37501 37500 3625 10 362501 125 1250 Oct-25 5000 55000 0 11 5000 55000 Totals 18750 174375 13625 118125 5125 56250 10 Periodic :LIFO Goods Purchasd Cost of Goods Sold Inventory Balance cost of Goods # of Units Cost Per Cost of Cost Per Ending # of Units Cost Per Unit Available for sales sold Unit Goods Sold # of Units Unit Inventory Beginning inventory 2500 17500 2500 7 17500 Purchases Oct-03 3125 25000 500 8 40001 2625 21000 Oct-09 4375 39375 4375 39375 Oct-19 3750 37500 3750 37500 Oct-25 5000 55000 5000 11 55000 11 Totals 18750 174375 13625 135875 5125 38500 10 10

Periodic : Weighted Average Goods Purchasd Cost of Goods Sold cost of Goods # of Units Cost Per Cost of Cost Per Unit Available for sales sold Unit Goods Sold Inventory Balance Cost Per Ending # of Units Unit Inventory # of Units sold 2500 17500 Beginning inventory Purchases Oct-03 Oct-09 Oct-19 Oct-25 Totals 3125 4375 3750 5000 18750 10 11 9.30 25000 39375 37500 55000 174375 13625 9.30 126713 5125 9.30 47663 Answers The cost of Goods Available for sale Average Cost per unit =(174375/18750) FIFO LIFO Ending inventoy 56250 Cost of Goods Sold 118125 174375 9.30 Weighted Average 38500 47663 135875 126713