Problem 6-03A a, b1-b2, c (Video)

Sekhon Company had a beginning inventory on January 1 of 160 units of Product 4-18-15 at a cost of $20 per unit. During the year, the following purchases were made.

Mar. 15		400 units		at		$23		Sept. 4		330 units		at		$26
July 20		250 units		at		$24		Dec. 2		100 units		at		$29

1,000 units were sold. Sekhon Company uses a periodic inventory system.

Determine the cost of goods available for sale.

The cost of goods available for sale

$Enter the cost of goods available for sale in dollars

Calculate average cost per unit. (Round answer to 3 decimal places, e.g. 1.250.)

Average cost per unit

$Enter the average cost per unit in dollars

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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. 1,250.)

		FIFO		LIFO		AVERAGE-COST
The ending inventory		$Enter a dollar amount		$Enter a dollar amount		$Enter a dollar amount
The cost of goods sold		$Enter a dollar amount		$Enter a dollar amount		$Enter a dollar amount

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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)		Select a cost flow method FIFOLIFOAverage-cost results in the highest inventory amount, $Enter a dollar amount .
(2)		Select a cost flow method FIFOLIFOAverage-cost produces the highest cost of goods sold, $Enter a dollar amount .