Cullumber Company markets CDs of numerous performing artists. At the beginning of March, Cullumber Company had in beginning inventory 2,690 CDs with a unit cost of $7. During March, Cullumber Company made the following purchases of CDs. March 5 1,810 @ $8 March 21 4,630 @ $10 March 13 3,180 @ $9 March 26 2,100 @ $11 During March 11,470 units were sold. Cullumber Company uses a periodic inventory system. Your answer is partially correct. Try again. (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.) Average 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.) FIFO LIFO AVERAGE-COST The ending inventory $ $ $ The 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? (1) Average-cost FIFO LIFO produces the highest inventory amount. (2) Average-cost FIFO LIFO produces the highest cost of goods sold.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Cullumber Company markets CDs of numerous performing artists. At the beginning of March, Cullumber Company had in beginning inventory 2,690 CDs with a unit cost of $7. During March, Cullumber Company made the following purchases of CDs.

March 5		1,810		@		$8		March 21		4,630		@		$10
March 13		3,180		@		$9		March 26		2,100		@		$11

During March 11,470 units were sold. Cullumber Company uses a periodic inventory system.


	Your answer is partially correct. Try again.

(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.)

Average 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.)

	FIFO	LIFO	AVERAGE-COST
The ending inventory	$	$	$
The 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?

(1)		Average-cost FIFO LIFO produces the highest inventory amount.
(2)		Average-cost FIFO LIFO produces the highest cost of goods sold.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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