Question 3 Tokyo Audio uses a periodic inventory system. One of the store's most popular products is an AB3 car stereo system. The inventory quantities, purchases, and sales of this product for the most recent year are as follows: Cost per unit $2,990 3,060 3,080 3,150 3,200 Number of Units Total cost Inventory, 1 January First purchase Second purchase Third purchase Fourth purchase $29,900 45,900 61,600 25,200 60,800 $223,400 10 15 20 8. 19 Goods available for sale 72 Units sold during the year Inventory, 31 December 51 21 Instructions a) Using periodic costing procedures, compute the cost of the 31 December inventory and the cost of goods sold for the AB3 systems during the year under each of the following cost flow assumptions: 1. First-in, first-out. 2. Weighted average cost (round to nearest dollar, except unit cost). b) Which inventory pricing methods provides the most realistic year-end valuation of ending inventory in light of the net realizable value (NRV) of the AB3 units? Does this same method also produce the most realistic measure of profit in light of the NRV of the AB3 systems when they are sold? Explain.

Question 3 Tokyo Audio uses a periodic inventory system. One of the store's most popular products is an AB3 car stereo system. The inventory quantities, purchases, and sales of this product for the most recent year are as follows: Cost per unit $2,990 3,060 3,080 3,150 3,200 Number of Units Total cost Inventory, 1 January First purchase Second purchase Third purchase Fourth purchase $29,900 45,900 61,600 25,200 60,800 $223,400 10 15 20 8. 19 Goods available for sale 72 Units sold during the year Inventory, 31 December 51 21 Instructions a) Using periodic costing procedures, compute the cost of the 31 December inventory and the cost of goods sold for the AB3 systems during the year under each of the following cost flow assumptions: 1. First-in, first-out. 2. Weighted average cost (round to nearest dollar, except unit cost). b) Which inventory pricing methods provides the most realistic year-end valuation of ending inventory in light of the net realizable value (NRV) of the AB3 units? Does this same method also produce the most realistic measure of profit in light of the NRV of the AB3 systems when they are sold? Explain.

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Description: Question 3Tokyo Audio uses a periodic inventory system. One of the store's most popular products is an AB3 carstereo system. The inventory quantities, purchases, and sales of this product for the most recent year areas follows:Number of UnitsTotal c

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 64E: ( Appendix 6B) Inventory Costing Methods: Periodic System Harrington Company had the following data...

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