Two

Castano Patino Enterprises has the following information available about inventory purchases and sales during the year. All sales of inventory were made at a price of $3.00 per unit. Castano Patino uses a perpetual inventory approach, which means that cost of goods sold are computed at the time of the sale (rather than only at the end of the year). Hint: That means there will be different COGS for sales on different dates. If this is not clear, if this gets you stuck or confused, please just ask me for help. Pages 219-223 of your textbook has a comprehensive example that may be helpful as well.

Show/explain your work if you want the chance to earn partial credit for any wrong answers.

Date		# units	cost per unit	Total
January 1	Beginning inventory	500	$1.00	$500
February 5	Purchase	350	1.10	385
April 12	Sale	(550)
July 17	Sale	(200)
September 23	Purchase	400	1.30	520
November 5	Sale	(300)

Required:

A What Compute Castano Patinos Cost of Goods Sold and its Inventory balance at the end of the year assuming they use the FIFO cost flow assumption.

B Compute Castano Patinos Cost of Goods Sold and its Inventory balance at the end of the year assuming they use the LIFO cost flow assumption.

C Compute Castano Patinos Cost of Goods Sold and its Inventory balance at the end of the year assuming they use the Average Cost cost flow assumption.

D What must be true about the sum of COGS and the ending inventory balance for all three of your answers in (1) - (3)?