Reference no: EM133121160

Question - On December 1, Discount Electronics Ltd. Has three DVD players left in stock. All are identical, all at priced to sell at NT$4,500. One of the three DVD players left in the stock, with serial #1012, was purchased on June 1 at a cost of NT$3,000. Another with serial #1045, was purchased on November 1 for NT$2,760. The last player, serial #1056, was purchased on November 30 for NT$2,520.

Required -

(a) Calculate the cost of goods sold using FIFO periodic inventory method assuming that two of the three players were sold by the end of December, Discount Electronics' year-end.

(b) If Discount Electronics used the specific identification method instead of the FIFO method, how might it alter its earnings by selectively choosing which particular pmayers to sell to the two customers? What would Discount's cost of goods sold be if the company wished to minimize earnings? Maximize earnings?

(c) Which of the two inventory methods do you recommend that Discount use? Explain why.