Question

In: Accounting

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.

DateActivitiesUnits Acquired at CostUnits sold at Retail
Jan.1Beginning inventory140units@$6.00=$840






Jan.10Sales








100units@$15
Jan.20Purchase60units@$5.00=
300






Jan.25Sales








80units@$15
Jan.30Purchase180units@$4.50=
810








Totals380units



$1,950
180units




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.

Required:

1. Complete the table to determine the costs assigned to ending inventory and to cost of goods sold using specific identification.

2. Determine the costs assigned to ending inventory and to cost of goods sold using weighted average.

3. Determine the costs assigned to ending inventory and to cost of goods sold using FIFO.

4. Determine the costs assigned to ending inventory and to cost of goods sold using LIFO.

Solutions

Expert Solution

1)

Available for Sale Cost of Goods Sold Ending Inventory
Purchase Date Activity Units Unit cost Units sold Unit cost COGS Ending Inventory-Units Cost Per unit Ending Inventory-Cost
Jan-01 Beginning Inventory    140.00 $      6.00        125.00 $      6.00 $     750.00                                      15.00 $              6.00 $                                90.00
Jan-20 Purchase      60.00 $      5.00          55.00 $      5.00 $     275.00                                        5.00 $              5.00 $                                25.00
Jan-30 Purchase    180.00 $      4.50                 -                                      180.00 $              4.50 $                             810.00
   380.00        180.00 $ 1,025.00                                    200.00 $                             925.00

2)

Goods Purchased Cost of Goods Sold Inventory Balance
Date Units Cost per unit Units sold Cost per unit COGS Units Cost per unit Inventory Balance
Jan-01    140.00 @ $                  6.00 = $                        840.00
Jan-10    100.00 @ $              6.00 = $     600.00      40.00 @ $                  6.00 = $                        240.00
Jan-20      60.00 @ $              5.00      40.00 @ $                  6.00 = $                        240.00
     60.00 @ $                  5.00 = $                        300.00
Average cost    100.00 @ $                  5.40 = $                        540.00
Jan-25      80.00 @ $              5.40 = $     432.00      20.00 @ $                  5.40 = $                        108.00
Jan-30    180.00 @ $              4.50      20.00 @ $                  5.40 = $                        108.00
   180.00 @ $                  4.50 = $                        810.00
Totals $ 1,032.00    200.00 @ $                  4.59 = $                        918.00

3)

Goods Purchased Cost of Goods Sold Inventory Balance
Date Units Cost per unit Units sold Cost per unit COGS Units Cost per unit Inventory Balance
Jan-01    140.00 @ $                  6.00 = $                        840.00
Jan-10    100.00 @ $              6.00 = $     600.00      40.00 @ $                  6.00 = $                        240.00
Jan-20      60.00 @ $              5.00      40.00 @ $                  6.00 = $                        240.00
     60.00 @ $                  5.00 = $                        300.00
$                        540.00
Jan-25      40.00 @ $              6.00 = $     240.00             -   @ $                  6.00 = $                                 -  
     40.00 @ $              5.00 = $     200.00      20.00 @ $                  5.00 = $                        100.00
$     440.00 $                        100.00
Jan-30    180.00 @ $              4.50             -   @ $                  6.00 = $                                 -  
     20.00 @ $                  5.00 = $                        100.00
   180.00 @ $                  4.50 = $                        810.00
Totals $ 1,040.00 $                        910.00

4)

Goods Purchased Cost of Goods Sold Inventory Balance
Date Units Cost per unit Units sold Cost per unit COGS Units Cost per unit Inventory Balance
Jan-01    140.00 @ $                  6.00 = $                        840.00
Jan-10    100.00 @ $              6.00 = $     600.00      40.00 @ $                  6.00 = $                        240.00
Jan-20      60.00 @ $              5.00      40.00 @ $                  6.00 = $                        240.00
     60.00 @ $                  5.00 = $                        300.00
$                        540.00
Jan-25      20.00 @ $              6.00 = $     120.00      20.00 @ $                  6.00 = $                        120.00
     60.00 @ $              5.00 = $     300.00             -   @ $                  5.00 = $                                 -  
$     420.00 $                        120.00
Jan-30    180.00 @ $              4.50      20.00 @ $                  6.00 = $                        120.00
            -   @ $                  5.00 = $                                 -  
   180.00 @ $                  4.50 = $                        810.00
Totals $ 1,020.00 $                        930.00

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