Doom’s Day Distribution markets CDs of the performing artist Marilynn. At the beginning of October, Doom’s Day had in beginning inventory 2,000 of Marilynn’s CDs with a unit cost of $7. During October, Doom’s Day made the following purchases of Marilynn’s CDs.

Oct. 3 Oct. 9 3,000 @ $8 5,500 @ $9 Oct.19 4,000 @ $10 Oth 25° 2:000 @ $11 During October, 13,500 units were sold. Doom’s Day 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?