Vaughn Distribution markets CDs of the performing artist Unique. At the beginning of October, Vaughn had in beginning inventory 2,000 of Unique’s CDs with a unit cost of $5. During October, Vaughn made the following purchases of Unique’s CDs.Oct. 3 2,500 @ $6 Oct. 19 3,000 @ $8Oct. 9 3,500 @ $7 Oct. 25 4,000 @ $9During October, 10,850 units were sold. Vaughn uses a periodic inventory system. (b2)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 O decimal places, e.g. 1,250.)FIFOLIFOAVERAGE-COSTThe ending inventory$$The cost of goods sold$eTextbook and MediaSave for Later(c)Which cost flow method results in (1) the highest inventory amount for the balance sheet and (2) the highest cost of goods soldfor the income statement?(1)produces the highest inventory amount, $(2)produces the highest cost of goods sold, $eTextbook and MediaSave for Later%24%24%24 (a)Determine the cost of goods available for sale.Cost of goods available for sale$eTextbook and MediaSave for Later(b1)Calculate cost per unit. (Round answer to 2 decimal places, eg. 2.25.)Cost per uniteTextbook and MediaSave for Later

Under FIFO, it is assumed that goods purchased first are sold first and under LIFO, vice versa.

Answered: Vaughn Distribution markets CDs of the…

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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Vaughn Distribution markets CDs of the performing artist Unique. At the beginning of October, Vaughn had in beginning inventory 2,000 of Unique’s CDs with a unit cost of $5. During October, Vaughn made the following purchases of Unique’s CDs.

Oct. 3		2,500	@	$6		Oct. 19		3,000	@	$8
Oct. 9		3,500	@	$7		Oct. 25		4,000	@	$9

During October, 10,850 units were sold. Vaughn uses a periodic inventory system.

(b2)
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 O decimal places, e.g. 1,250.)
FIFO
LIFO
AVERAGE-COST
The ending inventory
$
$
The cost of goods sold
$
eTextbook and Media
Save for Later
(c)
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)
produces the highest inventory amount, $
(2)
produces the highest cost of goods sold, $
eTextbook and Media
Save for Later
%24
%24
%24

(a)
Determine the cost of goods available for sale.
Cost of goods available for sale
$
eTextbook and Media
Save for Later
(b1)
Calculate cost per unit. (Round answer to 2 decimal places, eg. 2.25.)
Cost per unit
eTextbook and Media
Save for Later

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