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

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 140 units @ $ 6.00 = $ 840 Jan. 10 Sales 100 units @ $ 15 Jan. 20 Purchase 60 units @ $ 5.00 = 300 Jan. 25 Sales 80 units @ $ 15 Jan. 30 Purchase 180 units @ $ 4.50 = 810 Totals 380 units $ 1,950 180 units The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 200 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory. Exercise 6-3 Perpetual: Inventory costing methods LO P1 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.

Solutions

Expert Solution

Solution 1:

Computation of COGS and ending inventory - Specific identification
Particulars Cost of goods available for sale Cost of goods sold Ending Inventory
Nos of units Unit Cost Cost of goods available for sale Nos of units sold Unit Cost Cost of goods sold Nos of units in ending inventory Unit Cost Ending inventory
Beginning inventory 140 $6.00 $840 125 $6.00 $750.00 15 $6.00 $90.00
Purchases:
20-Jan 60 $5.00 $300 55 $5.00 $275.00 5 $5.00 $25.00
30-Jan 180 $4.50 $810 0 $4.50 $0.00 180 $4.50 $810.00
Total 380 $1,950 180 $1,025.00 200 $925.00

solution 2:

Computation of ending inventory COGS under Weighted Average Cost - Laker Company
Date Beginning Inventory Purchase Cost of Goods Sold Ending Inventory
Qty Rate Amount Qty Rate Amount Qty Rate Amount Qty Rate Amount
1-Jan 140 $6.00 $840 0 $0.00 $0 0 $0.00 $0 140 $6.00 $840
10-Jan 140 $6.00 $840 0 $0.00 $0 100 $6.00 $600 40 $6.00 $240
20-Jan 40 $6.00 $240 60 $5.00 $300 0 $0.00 $0 100 $5.40 $540
25-Jan 100 $5.40 $540 0 $0.00 $0 80 $5.40 $432 20 $5.40 $108
25-Mar 20 $5.40 $108 180 $4.50 $810 0 $0.00 $0 200 $4.59 $918
Total 180 $1,032 200 $918

Solution 3:

Computation of ending inventory COGS under FIFO - Laker Company
Date Beginning Inventory Purchase Cost of Goods Sold Ending Inventory
Qty Rate Amount Qty Rate Amount Qty Rate Amount Qty Rate Amount
1-Jan 140 $6.00 $840.00 0 $0.00 $0.00 0 $0.00 $0.00 140 $6.00 $840.00
10-Jan 140 $6.00 $840.00 0 $0.00 $0.00 100 $6.00 $600.00 40 $6.00 $240.00
20-Jan 40 $6.00 $240.00 60 $5.00 $300.00 0 $0.00 $0.00 40 $6.00 $240.00
60 $5.00 $300.00
25-Jan 40 $6.00 $240.00 0 $0.00 $0.00 40 $6.00 $240.00 20 $5.00 $100.00
60 $5.00 $300.00 40 $5.00 $200.00
30-Jan 20 $5.00 $100.00 180 $4.50 $810.00 0 $0.00 $0.00 20 $5.00 $100.00
180 $4.50 $810.00
Total 180 $1,040.00 200 $910.00

Solution 4:

Computation of ending inventory COGS under LIFO - Laker Company
Date Beginning Inventory Purchase Cost of Goods Sold Ending Inventory
Qty Rate Amount Qty Rate Amount Qty Rate Amount Qty Rate Amount
1-Jan 140 $6.00 $840.00 0 $0.00 $0.00 0 $0.00 $0.00 140 $6.00 $840.00
10-Jan 140 $6.00 $840.00 0 $0.00 $0.00 100 $6.00 $600.00 40 $6.00 $240.00
20-Jan 40 $6.00 $240.00 60 $5.00 $300.00 0 $0.00 $0.00 40 $6.00 $240.00
60 $5.00 $300.00
25-Jan 40 $6.00 $240.00 0 $0.00 $0.00 60 $5.00 $300.00 20 $6.00 $120.00
60 $5.00 $300.00 20 $6.00 $120.00
30-Jan 20 $6.00 $120.00 180 $4.50 $810.00 0 $0.00 $0.00 20 $6.00 $120.00
180 $4.50 $810.00
Total 180 $1,020.00 200 $930.00

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