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	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	250	units	@	$	8.50	=		2,125
			Totals	555	units					$	5,045		275	units

The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 280 units, where 250 are from the January 30 purchase, 5 are from the January 20 purchase, and 25 are from beginning inventory.

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.

	Weighted Average - Perpetual: Goods Purchased Cost of Goods Sold Inventory Balance Date # of units Cost per unit # of units sold Cost per unit Cost of Goods Sold # of units Cost per unit Inventory Balance January 1 175 @ $10.00 = $1,750.00 January 10 135 @ $10.00 = $1,350.00 January 20 130 @ $9.00 @ 130 @ $9.00 = 1,170.00 Average cost 130 @ $1,170.00 January 25 January 30 Totals $1,350.00

Answer 1

Solution 1:

Computation of ending inventory COGS under Specific Identification
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	175	$10.00	$1,750	0	$0.00	$0.00	0	$0.00	$0.00	175	$10.00	$1,750.00
10-Jan	175	$10.00	$1,750	0	$0.00	$0.00	135	$10.00	$1,350.00	40	$10.00	$400.00
20-Jan	40	$10.00	$400.00	130	$9.00	$1,170.00	0	$0.00	$0.00	40	$10.00	$400.00
										130	$9.00	$1,170.00
25-Jan	40	$10.00	$400.00	0	$0.00	$0.00	15	$10.00	$150.00	25	$10.00	$250.00
	130	$9.00	$1,170.00				125	$9.00	$1,125.00	5	$9.00	$45.00
30-Jan	25	$10.00	$250.00	250	$8.50	$2,125.00	0	$0.00	$0.00	25	$10.00	$250.00
	5	$9.00	$45.00							5	$9.00	$45.00
										250	$8.50	$2,125.00
Total							275		$2,625.00	280		$2,420.00

Solution 2:

Computation of ending inventory COGS under Weighted Average Cost
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	175	$10.00	$1,750	0	$0.00	$0	0	$0.00	$0	175	$10.00	$1,750
10-Jan	175	$10.00	$1,750	0	$0.00	$0	135	$10.00	$1,350	40	$10.00	$400
20-Jan	40	$10.00	$400	130	$9.00	$1,170	0	$0.00	$0	170	$9.24	$1,570
25-Jan	170	$9.24	$1,570	0	$0.00	$0	140	$9.24	$1,293	30	$9.24	$277
30-Jan	30	$9.24	$277	250	$8.50	$2,125	0	$0.00	$0	280	$8.58	$2,402
Total							275		$2,643	280		$2,402

Solution 3:

Computation of ending inventory COGS under FIFO
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	175	$10.00	$1,750.00	0	$0.00	$0.00	0	$0.00	$0.00	175	$10.00	$1,750.00
10-Jan	175	$10.00	$1,750.00	0	$0.00	$0.00	135	$10.00	$1,350.00	40	$10.00	$400.00
20-Jan	40	$10.00	$400.00	130	$9.00	$1,170.00	0	$0.00	$0.00	40	$10.00	$400.00
										130	$9.00	$1,170.00
25-Jan	40	$10.00	$400.00	0	$0.00	$0.00	40	$10.00	$400.00	30	$9.00	$270.00
	130	$9.00	$1,170.00				100	$9.00	$900.00
30-Jan	30	$9.00	$270.00	250	$8.50	$2,125.00	0	$0.00	$0.00	30	$9.00	$270.00
										250	$8.50	$2,125.00
Total							275		$2,650.00	280		$2,395.00

Solution 4:

Computation of ending inventory COGS under LIFO
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	175	$10.00	$1,750.00	0	$0.00	$0.00	0	$0.00	$0.00	175	$10.00	$1,750.00
10-Jan	175	$10.00	$1,750.00	0	$0.00	$0.00	135	$10.00	$1,350.00	40	$10.00	$400.00
20-Jan	40	$10.00	$400.00	130	$9.00	$1,170.00	0	$0.00	$0.00	40	$10.00	$400.00
										130	$9.00	$1,170.00
25-Jan	40	$10.00	$400.00	0	$0.00	$0.00	130	$9.00	$1,170.00	30	$10.00	$300.00
	130	$9.00	$1,170.00				10	$10.00	$100.00
30-Jan	30	$10.00	$300.00	250	$8.50	$2,125.00	0	$0.00	$0.00	30	$10.00	$300.00
										250	$8.50	$2,125.00
Total							275		$2,620.00	280		$2,425.00