Reference no: EM132562900

Computing Cost of Goods Sold and Ending Inventory under FIFO, LIFO, and Average Cost.

Assume that Madden Co. reports the following initial balance and subsequent purchase of inventory:

Inventory Balance at beginning of year.................... 1,300 units @ $150 each...$195,000
Inventory purchased during the year..........................1,700 units @ $180 each.....$306,000
Cost of goods available for sale during the year...3,000 units...............................$501,000

Question 1: Assume that 2,000 units are sold during the year. Compute the cost of goods sold for the year and the inventory on the year-end balance sheet under the following inventory costing methods: (Make sure that you are not just posting the solution, but explaining your answer and showing your work):

FIFO
LIFO
Average Cost