Heartland Distribution markets CDs of the performing artist Brooks Straight. At the beginning of October, Heartland had in beginning inventory 1,000 Straight CDs with a unit cost of $5. During October Heartland made the following purchases of Straight CDs:

During October 11,000 units were sold. Heartland uses a periodic inventory system.
Instructions

(a) Determine the cost of goods available for sale.

(b) 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.

(c) 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?

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Oct. 3 3,500 @ $6 Oct. 19 3,000 @ $8 Oct. 9 4,000 @ $7 Oct. 25 2,000 @ $9