Question

Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the accounting period, January 31. The inventory’s selling price is $12 per unit.

Transactions	Unit Cost			Units			Total Cost
Inventory, January 1	$	4.00			190		$	760
Sale, January 10					(170	)
Purchase, January 12		4.50			240			1,080
Sale, January 17					(110	)
Purchase, January 26		5.50			70			385

Assume that for Specific identification method the January 10 sale was from the beginning inventory and the January 17 sale was from the January 12 purchase.

1. LIFO

2. Specific identification

please explain HOW you got this answer

Answer 1

Solution 1:

Computation of COGS and ending inventory - Periodic LIFO
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	190	$4.00	$760	0	$4.00	$0.00	190	$4.00	$760.00
Purchases:
12-Jan	240	$4.50	$1,080	210	$4.50	$945.00	30	$4.50	$135.00
26-Jan	70	$5.50	$385	70	$5.50	$385.00	0	$5.50	$0.00
Total	500		$2,225	280		$1,330.00	220		$895.00

Solution 2:

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	190	$4.00	$760	170	$4.00	$680.00	20	$4.00	$80.00
Purchases:
12-Jan	240	$4.50	$1,080	110	$4.50	$495.00	130	$4.50	$585.00
26-Jan	70	$5.50	$385	0	$5.50	$0.00	70	$5.50	$385.00
Total	500		$2,225	280		$1,175.00	220		$1,050.00