Question

 

Laker Company reported the following January purchases and sales data for its only product.

Date			Activities	Units Acquired at Cost								Units sold at Retail
Jan.	1		Beginning inventory	220	units	@	$	14.50	=	$	3,190
Jan.	10		Sales										170	units	@	$	23.50
Jan.	20		Purchase	170	units	@	$	13.50	=		2,295
Jan.	25		Sales										200	units	@	$	23.50
Jan.	30		Purchase	340	units	@	$	13.00	=		4,420
			Totals	730	units					$	9,905		370	units

The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 360 units, where 340 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory.

Required:
1. Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification.
2. Determine the cost assigned to ending inventory and to cost of goods sold using weighted average.
3. Determine the cost assigned to ending inventory and to cost of goods sold using FIFO.
4. Determine the cost assigned to ending inventory and to cost of goods sold using LIFO.

Answer 1

FIFO method
	receipts	issue	balance
	qty	$	value	qty	$	value	qty	$	value
Jan-01							220	14.5	3190
Jan-10				170	14.5	2465	50	14.5	725
Jan-20	170	13.5	2295				50	14.5	725
							170	13.5	2295
Jan-25				50	14.5	725
				150	13.5	2025	20	13.5	270
Jan-30	340	13	4420				20	13.5	270
							340	13	4420
									4690
LIFO method
	receipts	issue	balance
	qty	$	value	qty	$	value	qty	$	value
Jan-01							220	14.5	3190
Jan-10				170	14.5	2465	50	14.5	725
Jan-20	170	13.5	2295				50	14.5	725
							170	13.5	2295
Jan-25				170	13.5	2295
				30	14.5	435	20	14.5	290
Jan-30	340	13	4420				20	14.5	290
							340	13	4420
									4710
WACO method
	receipts	issue	balance
	qty	$	value	qty	$	value	qty	$	value
Jan-01							220	14.5	3190
Jan-10				170	14.5	2465	50	14.5	725
							270	14.5	3915
Jan-20	170	13.5	2295				50	14.5	725
							170	13.5	2295
							220	13.72727	3020
Jan-25				200	13.72727	2745.455
							20	13.72727	274.5455
Jan-30	340	13	4420				20	13.72727	274.5455
							340	13	4420
							360	13.0404	4694.545