Problem 6-2A Riverbed Corp markets CDs of numerous performing artists. At the beginning of March, Riverbed Corp had in beginning inventory 2,510 CDs with a unit cost of $7. During March, Riverbed Corp made the following purchases of CDs. 4,890 @ $10 March 5 March 13 2,200 @ $8 3,340 @ $9 March 21 March 26 1,800 @ $11 During March 11,860 units were sold. Riverbed Corp 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.) 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.) The ending inventory The cost of goods sold $ $ FIFO LIFO AVERAGE-COST

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.