Reference no: EM132774257
Question - The Audiophile sells high-performance stereo equipment. Massachusetts Acoustic recently introduced the Carnegie-440, a state-of-the-art speaker system. During the current year, The Audiophile purchased nine of these speaker systems at the following dates and acquisition costs:
Date Units Purchased Unit Cost Total Cost
Oct. 1 2 $3,000 $ 6,000
Nov. 17 3 3,200 9,600
Dec. 1 4 3,250 $13,000
Available for sale during the year 9 $28,600.
On November 21, The Audiophile sold four of these speaker systems to the Boston Symphony. The other five Carnegie-440s remained in inventory at December 31.
Instructions - Assume that The Audiophile uses a periodic inventory system.
(1) Compute the cost of goods sold relating to the sale of Carnegie-440 speakers to the Boston Symphony/
(2) Compute the ending inventory of these speakers at December 31, using each of the following flow assumptions:
a. Average cost.
b. Last-in, first-out (LIIFO).