Question

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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	175	units	@	$	10.00	=	$	1,750
Jan.	10	Sales										135	units	@	$	19.00
Jan.	20	Purchase	130	units	@	$	9.00	=		1,170
Jan.	25	Sales										140	units	@	$	19.00
Jan.	30	Purchase	275	units	@	$	8.00	=		2,200
		Totals	580	units					$	5,120		275	units

Required:
The Company uses a periodic inventory system. For specific identification, ending inventory consists of 305 units, where 275 are from the January 30 purchase, 5 are from the January 20 purchase, and 25 are from beginning inventory. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average, (c) FIFO, and (d) LIFO.

  

Answer 1

		Specific Identification	Weighted Average	FIFO	LIFO
Ending Inventory		2,495	2,693	2,470	2,920
Cost of goods sold		2,625	2,428	2,650	2,200
	Cost of goods available for sale			Cost of goods sold			Ending Inventory
Specific Identification	# of units    (A)	Cost per unit	Cost of goods available for sale	# of units sold               (B)	Cost per unit	Cost of goods sold	# of units in ending inventory	Cost per unit	Ending Inventory
Jan-01	175	$    10.00	$    1,750	150	$    10.00	$    1,500	25	$    10.00	$        250
Jan-20	130	$       9.00	$    1,170	125	$       9.00	$    1,125	5	$       9.00	$          45
Jan-30	275	$       8.00	$    2,200	-	$       8.00	$           -	275	$       8.00	$    2,200
Total	580		5,120	275		2,625	305		2,495
	Cost of goods available for sale			Cost of goods sold			Ending Inventory
Weighted Average	# of units    (A)	Cost per unit	Cost of goods available for sale	# of units sold               (B)	Cost per unit	Cost of goods sold	# of units in ending inventory      (A) - (B)	Cost per unit	Ending Inventory
Jan-01	175	$    10.00	$    1,750
Jan-20	130	$       9.00	$    1,170
Jan-30	275	$       8.00	$    2,200
Total	580	$       8.83	5,120	275	$       8.83	2,428	305	$       8.83	2,693
Weighted average rate	=	$5120 / 580
	=	$       8.83
	Cost of goods available for sale			Cost of goods sold			Ending Inventory
FIFO	# of units    (A)	Cost per unit	Cost of goods available for sale	# of units sold               (B)	Cost per unit	Cost of goods sold	# of units in ending inventory      (A) - (B)	Cost per unit	Ending Inventory
Jan-01	175	$    10.00	$    1,750	175	$    10.00	$    1,750	-	$    10.00	$           -
Jan-20	130	$       9.00	$    1,170	100	$       9.00	$        900	30	$       9.00	$        270
Jan-30	275	$       8.00	$    2,200	0	$       8.00	$           -	275	$       8.00	$    2,200
Total	580		5,120	275		2,650	305		2,470
	Cost of goods available for sale			Cost of goods sold			Ending Inventory
LIFO	# of units    (A)	Cost per unit	Cost of goods available for sale	# of units sold               (B)	Cost per unit	Cost of goods sold	# of units in ending inventory      (A) - (B)	Cost per unit	Ending Inventory
Jan-01	175	$    10.00	$    1,750	-	$    10.00	$           -	175	$    10.00	$    1,750
Jan-20	130	$       9.00	$    1,170	-	$       9.00	$           -	130	$       9.00	$    1,170
Jan-30	275	$       8.00	$    2,200	275	$       8.00	$    2,200	-	$       8.00	$           -
Total	580		5,120	275		2,200	305		2,920