Question

Xinxin Distribution markets CDs of the performing artist Carly. At the beginning of March, Xinxin had in beginning inventory 1,500 Carly CDs with a unit cost of $7. During March Xinxin made the following purchases of Carly CDs.
March 5 3,000 @ $8 ..... March 21 4,000 @ $10
March 13 4,500 @ $9 ..... March 26 2,500 @ $11
During March, 12,000 units were sold. Xinxin uses a periodic inventory system.

Instructions
(a) Determine the cost of goods available for sale.
(b) Determine
(1) The ending inventory
(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.
(c) Which cost flow method results in
(1) The highest inventory amount for the balance sheet
(2) The highest cost of goods sold for the income statement?



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  • CreatedJanuary 30, 2014
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