Question

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.

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.

Answer 1

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