Lord Voldemort markets CDs of the performing artist Harry Potter. At the beginning of October, Voldemort had in beginning inventory 2,000 of Potters CDs with a unit cost of Tk10.50. During October Voldemort made the following purchases of Hickss CDs.

Oct. 3: 4,000 units @ Tk. 10.00 Oct. 19: 3,500 units @ Tk. 9.00

Oct. 9: 3,500 units @ Tk. 9.50 Oct. 25: 5,000 units @ Tk. 8.50

During October 13,400 units were sold. Soul Patrol uses a periodic inventory system.

Requirements: (Marks 5)

1. Determine the cost of goods available for sale.

2. Determine the (1) ending inventory and (2) the cost of goods sold under FIFO and LIFO average cost flow methods. Proof is required for cost of goods son under FIFO and LIFO method.

3. Which cost flow method results in the highest inventory amount for the balance sheet and the highest cost of goods sold for the income statement? Why?