Question

Use the following information for the Exercises below. [The following information applies to the questions displayed below.] 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 210 units @ $ 13.50 = $ 2,835 Jan. 10 Sales 160 units @ $ 22.50 Jan. 20 Purchase 150 units @ $ 12.50 = 1,875 Jan. 25 Sales 180 units @ $ 22.50 Jan. 30 Purchase 340 units @ $ 12.00 = 4,080 Totals 700 units $ 8,790 340 units rev: 03_03_2017_QC_CS-81438, 10_11_2018_QC_CS-142961 Exercise 6-5A Periodic: Inventory costing LO P3 Required: The Company uses a periodic 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. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average, (c) FIFO, and (d) LIFO.

Answer 1

Solution:

Computation of ending inventory and cost of goods sold under Periodic- Specific identification
(a) Specific Identification	Cost of Goods Available for sale			Cost of goods sold			Inventory Balance
	No. of Units	Cost Per unit	Cost of Goods Available for Sale	No. of Units sold	Cost Per unit	Cost of Goods sold	Ending Inventory Units	Cost per unit	Ending Inventory Cost
Beginning Inventory	210	$13.50	$2,835.00	195	$13.50	$2,632.50	15	$13.50	$202.50
Purchases:
20-Jan	150	$12.50	$1,875.00	145	$12.50	$1,812.50	5	$12.50	$62.50
30-Jan	340	$12.00	$4,080.00	0			340	$12.00	$4,080.00
Total	700		$8,790.00	340		$4,445.00	360		$4,345.00

Computation of ending inventory and cost of goods sold under
(b ) Weigheted Average	Goods Available for sale			Cost of goods sold			Ending Inventory
	No. of Units	Cost Per unit	Cost of Goods Available for Sale	No. of Units sold	Average Cost	Cost of Goods sold	Ending Inventory Units	Average Cost	Ending Inventory Cost
Beginning Inventory	210	$13.50	$2,835.00
Purchases:
20-Jan	150	$12.50	$1,875.00
30-Jan	340	$12.00	$4,080.00
Total	700		$8,790.00	340	12.56	$4,270.40	360	12.56	$4,521.60
Average Cost per unit		12.56

Computation of ending inventory and cost of goods sold under Periodic FIFO
c) periodic FIFO	Goods Available for sale			Cost of goods sold			Ending Inventory
	No. of Units	Cost Per unit	Cost of Goods Available for Sale	No. of Units sold	Cost Per unit	Cost of Goods sold	Ending Inventory Units	Cost per unit	Ending Inventory Cost
Beginning Inventory	210	$13.50	$2,835.00	210	$13.50	$2,835.00	0
Purchases:
20-Jan	150	$12.50	$1,875.00	130	$12.50	$1,625.00	20	$12.50	$250.00
30-Jan	340	$12.00	$4,080.00				340	$12.00	$4,080.00
Total	700		$8,790.00	340		$4,460.00	360		$4,330.00

Computation of ending inventory and cost of goods sold under Periodic LIFO
(d) periodic LIFO	Goods Available for sale			Cost of goods sold			Ending Inventory
	No. of Units	Cost Per unit	Cost of Goods Available for Sale	No. of Units sold	Cost Per unit	Cost of Goods sold	Ending Inventory Units	Cost per unit	Ending Inventory Cost
Beginning Inventory	210	$13.50	$2,835.00				210	$13.50	$2,835.00
Purchases:
20-Jan	150	$12.50	$1,875.00			$0.00	150	$12.50	$1,875.00
30-Jan	340	$12.00	$4,080.00	340	$12.00	$4,080.00	0
Total	700		$8,790.00	340		$4,080.00	360		$4,710.00