In: Accounting
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.
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 |