Larkspur, Inc. markets CDs of numerous performing artists. At the beginning of March, Larkspur, Inc. had in beginning inventory 2,520 CDs with a unit cost of $7. During March, Larkspur, Inc. made the following purchases of CDs.

March 5		2,180		@		$8		March 21		4,710		@		$10
March 13		3,440		@		$9		March 26		2,120		@		$11

During March 11,530 units were sold. Larkspur, Inc. uses a periodic inventory system.

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

The cost of goods available for sale

$

(b) Calculate Average Cost. (Round answer to 3 decimal places, e.g. 5.125.)

Average Cost

$

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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). (Round answers to 0 decimal places, e.g. 125.)

		FIFO		LIFO		AVERAGE-COST
The ending inventory		$		$		$
The cost of goods sold		$		$		$

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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?

(1)		Average-costFIFOLIFO produces the highest inventory amount.
(2)		Average-costFIFOLIFO produces the highest cost of goods sold.