Mullins Distribution markets CDs of numerous performing artists. At the beginning of March, Mullins had in beginning inventory 2,500 CDs with a unit cost of $6. During March, Mullins made the following purchases of CDs.

March5	3,000 @ $7	March21	5,000 @$9
March 13	3,500 @ $8	March 26	2,000 @ $10

During March, 12,000 units were sold. Mullins uses a periodic inventory system.

Instructions

1. Determine the cost of goods available for sale.
2. 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. (Note: For average-cost, carry cost per unit to two decimal places.)

b. Cost of goods sold:
FIFO	$91,000
LIFO	$103,500
Average	$96,760

3. 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?

Determine cost of goods sold and ending inventory using FIFO, LIFO, and average-cost in a periodic inventory system and assess financial statement effects.