Carey Distribution markets CDs of the performing artist Britney Agullierra .At the beginning of October, Carey
had in beginning inventory 1,000 Agullierra CDs with a unit cost of $5. During October Carey made the
following purchases of Agullierra CDs.
Oct. 3 3,500 units @ $6 Oct. 19 2,000 units @ $8
Oct. 9 4,000 units @ $7 Oct. 25 2,000 units @ $9
During October 9,500 units were sold. Carey uses a periodic inventory system.
Required:
Determine (1) the ending inventory and (2) the cost of goods sold (COGS) under each of the assumed
cost flow methods (FIFO, LIFO, and average-cost). Show that all the three approaches make the same
cost of goods available for sale, that is distributed to COGS and ending inventory.