P6-2BLifetime Distribution markets classic children's books. At the beginning of June, Lifetime had in beginning inventory 1,200 books with a unit cost of $3. During June, Lifetime made the following purchases of books.June 34,000 @ $3June 294,000 @ $6

June 187,500 @ $5

During June, 10,500 books were sold. Lifetime uses a periodic inventory system.

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

(LO 2), AP

(a) Cost of goods sold:

FIFO$42,100

LIFO$56,500

Average$48,475

Instructions

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

(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. (Note: For average-cost, round cost per unit to three decimal places.)

(c)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?