Question

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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	155	units	@	$	8.00	=	$	1,240
Jan.	10		Sales										115	units	@	$	17.00
Jan.	20		Purchase	90	units	@	$	7.00	=		630
Jan.	25		Sales										95	units	@	$	17.00
Jan.	30		Purchase	210	units	@	$	6.50	=		1,365
			Totals	455	units					$	3,235		210	units

The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 245 units, where 210 are from the January 30 purchase, 5 are from the January 20 purchase, and 30 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	LIFO	Weighted Average	Specific Identification
Ending inventory	$1,610	$1,645	$1,621	1640
COGS	$1,625	$1,590	$1,614	1595

Cost of Goods Available for Sale
	# of units	Cost per Unit	Cost of Goods Available for Sale
Beginning inventory	155	$8.00	$1,240
Purchases:
20-Jan	90	7	$630
30-Jan	210	6.5	$1,365
Total	455		$3,235
2
Ending inventory	245	units
455 purchases- 210 sales
3
Perpetual FIFO:
Goods Purchased			Cost of Goods Sold			Inventory Balance
Date	# of units	Cost per unit	# of units sold	Cost per unit	Cost of Goods Sold	# of units	Cost per unit	Inventory Balance
1-Jan						155	$8.00	1240
10-Jan			115	$8.00	$920.00	40	8	$            320
20-Jan	90	7				40	8	$320
						90	7	$630
25-Jan			40	8	320
			55	7	385	35	7	245
					705
30-Jan	210	$6.50				35	7	245
						210	$6.50	$1,365
								$1,610
Totals					$1,625.00	245		$1,610
LIFO:
	Goods Purchased		Cost of Goods Sold			Inventory Balance
Date	# of units	Cost per unit	# of units sold	Cost per unit	Cost of Goods Sold	# of units	Cost per unit	Inventory Balance
1-Jan						155	$8.00	1240
10-Jan			115	$8.00	$920.00	40	8	$            320
20-Jan	90	7				40	8	$320
						90	7	$630
25-Jan			90	7	630
			5	8	40	35	8	280
					670
30-Jan	210	$6.50				35	8	280
						210	$6.50	$1,365
								$1,645
Totals					$1,590.00	245		$1,645
Weighted Average Perpetual:
	Goods Purchased		Cost of Goods Sold			Inventory Balance
Date	# of units	Cost per unit	# of units sold	Cost per unit	Cost of Goods Sold	# of units	Cost per unit	Inventory Balance
1-Jan						155	$8.00	$1,240
10-Jan			115	$8.00	$920.00	40	$8.00	$320
20-Jan	90	7				40	$8.00	$320
						90	7	$630
						130	7.31	950
25-Jan			95	$7.31	$694.23	35	$7.31	$256
30-Jan	210	$6.50				35	7.31	$256
						210	6.5	$1,365
						245	$6.62	$1,621
Totals			210		$1,614.23	245	$6.62	$1,621
4
Specific Identification:
	Goods Purchased		Cost of Goods Sold			Inventory Balance
Date	# of units	Cost per unit	# of units sold	Cost per unit	Cost of Goods Sold	# of units	Cost per unit	Inventory Balance
1-Jan						155	$8.00	$1,240
10-Jan			115	8	920	40	$8.00	$320
20-Jan	90	7				40	$8.00	$320
						90	7	$630
25-Jan			10	$8.00	$80.00	30	$8.00	240
			85	7	$595.00	5	7	35
					675
30-Jan	210	$6.50				30	8	240
						5	7	35
						210	6.5	1365
Totals			210		1595	245		1640