2. Sample Problem Problem 17-2A

3. The following data pertains to Good Investment Accounting software packages in the inventory of Computer Bonanza Outlets DescriptionNumber of UnitUnit CostTotal Cost Beginning Inv., January 1 160$96.00$15,360.00 Purchases: May 1010098.009,800.00 August 1817098.2016,694.00 October 116098.3015,728.00 Total Merchandise available for sale 59057,582.00

4. Determine the cost of inventory on December 31 and the cost of goods sold for the year ending on that date using the FIFO method. Description# of unitsUnit costInventory valuation Cost of goods sold FIFO Oct. 1 purchase160$98.30$15,728.00 August 18 purchase 498.20392.80 Valuation ending inv. Dec 31 16416,120.80 COGS (57,582.00- 16,120.80) $41,461.20

5. Determine the cost of inventory on December 31 and the cost of goods sold for the year ending on that date using the LIFO method. Description# of unitsUnit costInventory valuation Cost of goods sold LIFO From inventory, Jan 1 160$96.00$15,360.00 May 10 purchase 498.00392.00 Valuation ending inv. Dec 31 16415,752.00 COGS (57,582.00- 15,752.00) $41,830.00

6. Determine the cost of inventory on December 31 and the cost of goods sold for the year ending on that date using the average cost method. Description# of unitsUnit costInventory valuation Cost of goods sold Average cost method Ave. cost per unit 57,582/590 $97.60 Valuation ending inv. Dec 31 16497.60$16,006.40 COGS (57,582.00- 16,006.40) $41,575.60

7. Assume that the replacement cost of each unit on December 31 is $98.25. Using the lower of cost or market rule, find the inventory amount under each of the methods from part 1. Method# of unitsValuation based on: cost Valuation based on: market Valuation basis Lower of cost or market FIFO164$16,120.80$16,113.00Market$16,113.00 LIFO16415,752.0016,113.00Cost15,752.00 Average cost 16416,006.4016,113.00Cost16,006.40