Problem - Glanville Distribution markets CDs of the performing artist Harrilyn Clooney. At the beginning of March, Glanville had in beginning inventory 1,540 Clooney CDs with a unit cost of $8.30. During March Glanville made the following purchases of Clooney CDs.
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March 5
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3,040 @ $9.30
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March 21
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4,040 @ $11.30
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March 13
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5,540 @ $10.30
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March 26
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2,040 @ $12.30
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Determine the cost of goods available for sale.
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.
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?