Whispering Winds Corp. markets CDs of numerous performing artists. At the beginning of March, Whispering Winds had in beginning inventory 2,800 CDs with a unit cost of $8. During March, Whispering Winds made the following purchases of CDs. March 5 2,000 @ $9 March 21 5,200 @ $11 March 13 4,000 @ $10 March 26 2,000 @ $12 During March 11,900 units were sold. Whispering Winds uses a periodic inventory system. Determine the cost of goods available for sale. The cost of goods available for sale $enter the cost of goods available for sale in dollars Calculate Average Cost. (Round answer to 3 decimal places, e.g. 5.125.) Average Cost $enter an average cost in dollars 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 $enter a dollar amount $enter a dollar amount $enter a dollar amount The cost of goods sold $enter a dollar amount $enter a dollar amount $enter a dollar amount 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) select a method which Average-costFIFOLIFO produces the highest inventory amount. (2) select a method which Average-costFIFOLIFO 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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Whispering Winds Corp. markets CDs of numerous performing artists. At the beginning of March, Whispering Winds had in beginning inventory 2,800 CDs with a unit cost of $8. During March, Whispering Winds made the following purchases of CDs.

March 5		2,000		@		$9		March 21		5,200		@		$11
March 13		4,000		@		$10		March 26		2,000		@		$12

During March 11,900 units were sold. Whispering Winds uses a periodic inventory system.

Determine the cost of goods available for sale.

The cost of goods available for sale

$enter the cost of goods available for sale in dollars

Calculate Average Cost. (Round answer to 3 decimal places, e.g. 5.125.)

Average Cost

$enter an average cost in dollars

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	$enter a dollar amount	$enter a dollar amount	$enter a dollar amount
The cost of goods sold	$enter a dollar amount	$enter a dollar amount	$enter a dollar amount

FIFO

LIFO

AVERAGE-COST

The ending inventory

$enter a dollar amount

The cost of goods sold

$enter a dollar amount

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)		select a method which Average-costFIFOLIFO produces the highest inventory amount.
(2)		select a method which Average-costFIFOLIFO 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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