Question

Problem 6-3A

Wildhorse Co. had a beginning inventory on January 1 of 308 units of Product 4-18-15 at a cost of $19 per unit. During the year, the following purchases were made.

Mar. 15

820 units

at

$22

Sept. 4

718 units

at

$25

July 20

513 units

at

$23

Dec. 2

205 units

at

$28

2,050 units were sold. Wildhorse Co. uses a periodic inventory system

a.Determine the cost of goods available for sale.

b. Calculate average cost per unit. (Round answer to 2 decimal places, e.g. 2.23.)

c. 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 answers to 0 decimal places, e.g. 1,250.)

d. 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?

Answer 1