anments/355039 Kimmel, Financial Accounting, 8e slo 1 Sratem Announcements CALCU

Question

anments/355039 Kimmel, Financial Accounting, 8e slo 1 Sratem Announcements CALCULATOR Problem 6 2A Marin Inc. markets CDs of numerous performing artists. At the beginning of March, Marin Inc had in beginning inventory 2,390 CDs with a unit cost of $8. During March, Marin Inc, made the following purchases of CDs March 5 2,110 March 21 5,000 $11 March 13 3,360 $10 March 26 1,970$12 During March 11,310 units were sold. Marin Inc, uses a periodic inventory system, (a) Determine the cost of goods available for sale. The cost of goods available for sale (b) Calculate Average Cost. (Round answer to 3 decimal places, e.g. 5.125.) s erage Cost 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. 125.) The ending inventory The cost of goods sold s Wthich 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? ' produces the highest inventory amount. " produces the highest cost of goods sold. @e6m w8. N

Explanation / Answer

STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC FIFO METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ Mar 2390 8 19120 2390 8 19120 Purchasse 5-Mar 2110 9 18990 2110 9 18990 13-Mar 3360 10 33600 3360 10 33600 21-Mar 5000 11 55000 3450 11 37950 1550 11 17050 26-Mar 1970 12 23640 1970 12 23640 TOTAL 14830 150350 11310 109660 3520 40690 STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC LIFO METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ Mar 2390 8 19120 2390 8 19120 Purchasse 5-Mar 2110 9 18990 980 9 8820 1130 9 10170 13-Mar 3360 10 33600 3360 10 33600 21-Mar 5000 11 55000 5000 11 55000 26-Mar 1970 12 23640 1970 12 23640 TOTAL 14830 150350 11310 121060 3520 29290 STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC WEIGHTED AVERAGE METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ Mar 2390 8 19120 Purchasse 5-Mar 2110 9 18990 13-Mar 3360 10 33600 21-Mar 5000 11 55000 26-Mar 1970 12 23640 TOTAL 14830 10.14 150350 11310 10.14 114683.4 3520 10.14 35667 Cost of Goods avaiable for sale : $ 150,350 Average cost: $ 10.14 per unit FIFO LIFO Average Ending inventory 40690 29290 35667 COGS 109660 121060 114683 FIFO produced the highest inventory amount LIFO produced the highest COGS

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