City Bicycle City Bicycle , a Cycling Store Has a Beginning

City Bicycle City Bicycle , a cycling store has a beginning inventory of one bi-level touring bicycle 1, for which it paid $2,500.Suppose that during the period the store purchases bi-level touring bicycle 2 for $2,900 and bi-level touring bicycle 3 for $3,000, and that it sells one bicycle for $5,500.The three bicycles are physically identical; the store acquired them at different times as their acquisition costs changed, so only their costs differ.
Using the City Bicycle example, suppose the cycling store uses the FIFO cost-flow assumption.The cost of goods sold is _____, and the ending inventory is _____.

A) $2,900; $5,500
B) $2,500; $5,900
C) $3,000; $5,400
D) $2,800; $5,600
E) cannot be determined with the information given

Correct Answer:

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