CHAPTER 06 INVENTORIES

Problem 01 Glanville Distribution markets CDs of the performing artist Harrilyn Clooney.At the beginning of March, Glanville had in beginning inventory 1, !! Clooney CDs "ith a unit cost of #$. During March Glanville made the follo"ing purchases of Clooney CDs. March %,!!! & #' March (1 ),!!! & #1! March 1% , !! & #* March (+ (,!!! & #11 During March 1(, !! units "ere sold. Glanville uses a periodic inventory system. Instructions ,a- Determine the cost of goods available for sale. ,b- Determine ,1- the ending inventory and ,(- the cost of goods sold under each of the assumed cost flo" methods ,./.0, 1/.0, and average2cost-. 3rove the accuracy of the cost of goods sold under the ./.0 and 1/.0 methods. ,c- 4hich cost flo" method results in ,1- the highest inventory amount for the balance sheet and ,(- the highest cost of goods sold for the income statement5 Problem 02 6ddings Company had a beginning inventory of )!! units of 3roduct 78A at a cost of #'.!! per unit. During the year, purchases "ere9 .eb. (! +!! units at #* Aug. 1( %!! units at #11 May !! units at #1! Dec. ' (!! units at #1( 6ddings Company uses a periodic inventory system. :ales totaled 1, !! units. Instructions ,a- Determine the cost of goods available for sale. ,b- Determine ,1- the ending inventory, and ,(- the cost of goods sold under each of the assumed cost flo" methods ,./.0, 1/.0, and average-. 3rove the accuracy of the cost of goods sold under the ./.0 and 1/.0 methods. ,c- 4hich cost flo" method results in ,1- the lo"est inventory amount for the balance sheet, and ,(- the lo"est cost of goods sold for the income statement5 Problem 03 :oul 3atrol Distribution markets CDs of the performing artist ;aylor Hicks. At the beginning of 0ctober, :oul 3atrol had in beginning inventory (,!!! of Hicks<s CDs "ith a unit cost of #$. During 0ctober :oul 3atrol made the follo"ing purchases of Hicks<s CDs. 0ct. % %,!!! & #' 0ct. 1* %,!!! & #1! 0ct. * %, !! & #* 0ct. ( %, !! & #11 During 0ctober, 11,)!! units "ere sold. :oul 3atrol uses a periodic inventory system. /nstructions ,a- Determine the cost of goods available for sale. ,b- Determine ,1- the ending inventory and ,(- the cost of goods sold under each of the assumed cost flo" methods ,./.0, 1/.0, and average2cost-. 3rove the accuracy of the cost of goods sold under the ./.0 and 1/.0 methods. ,c- 4hich cost flo" method results in ,1- the highest inventory amount for the balance sheet and ,(- the highest cost of goods sold for the income statement5 Problem 0 1obster Company had a beginning inventory on =anuary 1 of 1 ! units of 3roduct >?2 ) at a cost of #(! per unit. During the year, the follo"ing purchases "ere made. Mar. 1 )!! units at #(% :ept. ) % ! units at #(+ =uly (! ( ! units at #() Dec. ( 1!! units at #(* 1,!!! units "ere sold. 1obster Company uses a periodic inventory system. Instructions ,a- Determine the cost of goods available for sale. ,b- Determine ,1- the ending inventory, and ,(- the cost of goods sold under each of the assumed cost flo" methods ,./.0, 1/.0, and average2cost-. 3rove the accuracy of the cost of goods sold under the ./.0 and 1/.0 methods. ,c- 4hich cost flo" method results in ,1- the highest inventory amount for the balance sheet, and ,(- the highest cost of goods sold for the income statement5