Determine cost of goods sold and ending inventory using FIFO, LIFO, and average-cost with analysis

Glee Distribution markets CDs of the performing artist Unique. At the beginning of October, Glee had in beginning

inventory 2,000 of Unique's CDs with a unit cost of $7. During October, Glee made the following purchases of Unique's CDs.

Oct. 3

2,500 @ $8

Oct. 19

3,000 @ $10

Oct. 9

3,500 @$9

Oct. 25

4,000 @ $11

During October, 10,900 units were sold. Glee uses a periodic inventory system in part (a) and (b). Glee uses perpetual inventory system in part ( c).

Instructions

(a)

Determine the cost of goods available for sale. Value 18 pts.

(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. Value 75 pts.

( c)

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). Use the information given, fill the yellow area. Value 105 pts.

Date

Explanation

Units

Unit Cost

Total Cost

1-Jan

Beginning inventory

150

$ 11.00

#####

Purchases

100

$ 12.00

#####

Purchases

200

$ 13.00

5-May

Sale

400

3-Jun

Purchases

100

$ 14.00

Total Units Purchases

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