Glanville Distribution markets CDs of the performing artist Harrilyn Clooney. At the beginning of March, Glanville had in beginning inventory 1,620 Clooney CDs with a unit cost of $7.80. During March Glanville made the following purchases of Clooney CDs.
March 5 3,120 @ $8.80 March 21 4,120 @ $10.80
March 13 5,620 @ $9.80 March 26 2,120 @ $11.80
During March 12,500 units were sold. Glanville uses a periodic inventory system.
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. (Round the unit cost in the average cost method to 3 decimal places, e.g. 2.250. Round final answers to 0 decimal places, e.g. 125.)
FIFO LIFO Average Cost
Ending Inventory $ $ $
Cost of Goods Sold $ $ $
Which 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?
Highest inventory amount
Highest cost of goods sold