P6-2A Breathless Distribution markets CDs of the performing artist Christina Spears. At the beginning of
October, Breathless had in beginning inventory 1,000 Spears CDs with a unit cost of $5.
During October Breathless made the following purchases of Spears CDs.
Problem 6 – 2A: Determine cost of goods sold and ending inventory using FIFO, LIFO, and average cost with
analysis.
P6-2A Breathless Distribution markets CDs of the performing artist Christina Spears.
At the beginning of October, Breathless had in beginning inventory 1,000 Spears CDs with a unit cost of $5.
During October Breathless made the following purchases of Spears CDs.
3,500 @ $6 | Oct. 19 | 2,000 @ $8 | |
Oct. 9 | 4,000 @ $7 | Oct. 25 | 2,000 @ $9 |
During October 10,000 units were sold. Breathless uses a periodic inventory system.
Instructions
Determine the cost of goods available for sale.
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.
