Question

Required information The following information applies to the questions displayed below.) Laker Company reported the following January purchases and sales data for its only product. Date Activities Beginning Jan. 1 inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Totals Units Acquired at Cost Units sold at Retail 220 units@ $14.50 = $ 3,190 170 units@ $23.50 170 units@ $13.50 = 2,295 200 units @ $23.50 370 units@ $13.00 = 4,810 760 units $10,295 370 units Required: The Company uses a periodic inventory system. For specific identification, ending inventory consists of 390 units, where 370 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average, (FIFO, and (C) LIFO.

Answer 1

Cost assigned to ending inventory and cost of goods sold is as shown below:

Specific Identification	Cost of goods available for sale			Cost of goods sold			Ending Inventory
	No. of units	Cost per unit	Cost of goods available for sale	No. of units	Cost per unit	Cost of goods sold	No. of units	Cost per unit	Ending Inventory
Beginning Inventory	220	14.50	3,190	205	14.50	2,973	15	14.50	218
Purchases:
January 20	170	13.50	2,295	165	13.50	2,228	5	13.50	68
January 30	370	13.00	4,810				370	13.00	4,810
Total	760		10,295	370		5,200	390		5,095

Weighted Average	Cost of goods available for sale			Cost of goods sold			Ending Inventory
	No. of units	Cost per unit	Cost of goods available for sale	No. of units	Cost per unit	Cost of goods sold	No. of units	Cost per unit	Ending Inventory
Beginning Inventory	220	14.50	3,190	370	13.55	5,012	390	13.55	5,283
Purchases:
January 20	170	13.50	2,295
January 30	370	13.00	4,810
Total	760	13.55	10,295	370		5,012	390		5,283

FIFO	Cost of goods available for sale			Cost of goods sold			Ending Inventory
	No. of units	Cost per unit	Cost of goods available for sale	No. of units	Cost per unit	Cost of goods sold	No. of units	Cost per unit	Ending Inventory
Beginning Inventory	220	14.50	3,190	220	14.50	3,190
Purchases:
January 20	170	13.50	2,295	150	13.50	2,025	20	13.50	270
January 30	370	13.00	4,810				370	13.00	4,810
Total	760		10,295	370		5,215	390		5,080
LIFO	Cost of goods available for sale			Cost of goods sold			Ending Inventory
	No. of units	Cost per unit	Cost of goods available for sale	No. of units	Cost per unit	Cost of goods sold	No. of units	Cost per unit	Ending Inventory
Beginning Inventory	220	14.50	3,190				220	14.50	3,190
Purchases:
January 20	170	13.50	2,295				170	13.50	2,295
January 30	370	13.00	4,810	370	13.00	4,810
Total	760		10,295	370		4,810	390		5,485