i need answer this qustion please very importan Audio World sells high-performan
ID: 2470661 • Letter: I
Question
i need answer this qustion please very importan
Audio World sells high-performance stereo equipment. Simmons Acoustic recently introduced the Carnegie-440, a state of the art speaker system. During the current year, Audio World purchased nine of these speaker systems from Simmons Acoustic at the following dates and acquisition costs:
Date
Units Purchased
Unit Cost (RM)
Total Cost (RM)
Oct. 1
2
3,000
6,000
Nov. 17
3
3,200
9,600
Dec. 1
4
3,250
13,000
Available for sale during the year
9
28,600
On November 21, Audio World sold four of these speaker systems to the Denver Symphony. The other five Carnegie-440 remained in Audio World’s inventory at December 31.
Require
Assume that Audio World uses a perpetual inventory system. Compute (1) the cost of goods sold relating to the sale of Cornegie-440 speakers to the Denver Symphony and (2) the ending inventory of these speakers at December 31, using each of the following flow assumptions:
a- Average Cost
b- First-in, first-out (FIFO)
c- Last-in, first-out (LIFO)
Show the number of units and the unit cost of the cost layers comprising the cost of goods sold and the ending inventory.
Date
Units Purchased
Unit Cost (RM)
Total Cost (RM)
Oct. 1
2
3,000
6,000
Nov. 17
3
3,200
9,600
Dec. 1
4
3,250
13,000
Available for sale during the year
9
28,600
Explanation / Answer
FIFO METHOD
RECEIPTS ISSUES BALANCE
2
3
3000
3200
6000
9600
2
2
3000
3200
6000
6400
1
4
3200
3250
16200
WEIGHTED AVERAGE METHOD
5
3120
15600
3120
LIFO METHOD
3
1
3200
3000
9600
3000
1
4
3000
3250
3000
13000
DATE UNITS RATE AMOUNT UNITS RATE AMOUNT UNITS RATE AMOUNT OCT 1 2 3000 6000 2 3000 6000 NOV17 3 3200 96002
3
3000
3200
6000
9600
NOV212
2
3000
3200
6000
6400
1 3200 3200 DEC 1 4 3250 130001
4
3200
3250
16200
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