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Laker Company reported the following January purchases and sales data for its only product. Date Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Activities Units Acquired at Cost 90 units $700$ 1,330 10 units$6.00660 1,540 Units Sold at Retail 150 units 30 units @ $16.00 $16.00 280 units @ $5.50 1540 $3,530 Totals 580 units 280 units

Required The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 300 units, where 280 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, (c) FIFO, and (a) LIFO. (Round weighted average cost per unit to 2 decimal places.) a) Specific Identification Available for Sale Cost of Goods Sold Ending Inventory Ending Cost Per Inventory- Ending Purchase Date Jan. 1Beginning inventory Jan. 20 Purchase Jan. 30 Purchase Unit Un Cost Units Sold Unit Cost COGS Inventory-Unit S 7.00 $ 6.00 S 5.50 Activity Units Units Cost 190$ 7.00 110 $ 6.00 280$ 5.50 580 $ 7.00 $6.00 S 5.50 S 0.0 0 0.0

b)Weighted Average- Perpetual Goods Purchased Cost of Goods Sold Inventory Balance #of units Cost of Goods Sold Cost per | # of units Cost per unit # of units Cost per unit Inventory Balance Date unit sold January 1 January 10 January 20 190$ 40@ $ 40@ $ 110$ 150 @ 20 @ 20 @ 280@ 300 a 7.00 $1,330.00 7.00|=| $ 280.00 7.00$ 280.00 660.00 $ 940.00 150|@「$ 7.00 $1,050.00 110|@г$ 6.00 6.00 Average cost January 25 January 302 130 @ 280@$ 5.50 5.501,540.00 Totals $1,050.00

c) Perpetual FIFO: ods Purchas of Inventory Balance #of units cost per unit # of units sold Cost per Cost of Goods Sold Cost per Inventory Date # of units unit unit Balance 1907.001,330.00 January 1 January 10 January 20 40$7 40 110$ 6.00 7.00280.00 $ 7.00$ 280.00 660.00 $ 940.00 7.00$ 1,050.00 110 $ 6.00 January 25 40 110 $ 7.00$ 280.00 660.00 $ 940.00 6.00 January 30 280$ 5.50 Totals

d) Perpetual LIFO: Goods Purchased #of units Cost of Goods Sold Inventory Balance cost per unit # of units sold cost per unit Cost of Goods Sold Cost per Inventory Balance Date # of units unit January 1 January 10 January 20 January 25 January 30 Totals

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Answer #1

a) Working Notes: Calculation of Sales on Jan. 25 Closing Inventory on Jan. 30 (given) are 5 units of Jan. 20 and 15 units of Opening Total Units available for sale on Jan. 25 are 40 nits of Opening and 110 units of Jan. 20 So, Units of Sold in Jan. 25 is 25 units of opening i.e; (40-15 units ) and 105 units of Jan. 20 i.e (110 - 5 units) We can say that total sales of Jan. 25 is 130 i.e; 25units of opening and 105 units of jan. 20Specific Identification: Available for Sale Cost of goods sold Ending Invento Ending Inventory Units Ending Cost Per Invetory Date Activity UnitsUnit cost in $ Units Sold Unit CostCOGS Unit Cost Jan. 1 1Opening 1330 Jan. 10 Sales 150 1050 Jan. 20 Purchase110 110 660 Jan. 25 Sales 25 175 25 175 105 630 30 Jan. 30 Purchase280 5.5 5.5 30 105 1675 15 Total 1855 Therefore, Total cost of 130 units sold will be 175+ 630100 805 and cost of remaining 300 units will be $1675b) Formula Rate of cost per unit Total amount/Total Units Weighted average Available for Sale Cost of goods sold Ending Invento Date Unit cost | # of units | Cost per | Sold Cost of Cost perInventor Activity Units # of units sold in unit Goods slod unit Balnce Jan. 1 Opening 1330 Jan. 10 Sales 150 1050 280 Jan. 20 Purchase110 280 110 150 660 6.27 Jan. 25 Sales 130 6.27 814.6667 20 6.27 125.3333 6.27 125.3333 5.55 1665.333 Jan. 30 Purchase 280 5.5 20 280 300 @5.5 1540 Total 1864.666667 Therefore, Total cost of 130 units sold will be 814.6667 and cost of remaining 300 units will be 1665.333In the Question, it is mentioned that weighted average of cost per unit rounded of it to Two digit but it is not mentioned about the Total amount inventory cost.

So , Total amount has been kept at the full digit number.

c) In the Question, Jan. 25 Cost of Goods sold only to the extend of 130 units i.e; (90 +40) NOT 150 units i.e; ( 110+40) Because, in the Basic Given question it is clearly mentioning that total Units of 130 only Perpetual FIFO: Goods Purchased Cost of goods sold Inventory Balance Date Unit cost | # of units | Cost per | Sold Cost of # of units Sold 190 Cost perInventor Activity | Units | in unit Goods slod unit Balnce Jan. 1 1 Opening 190 1330 Jan. 10 Sales 150 1050 280 Jan. 20 Purchase110 40 280 110 660 Jan. 25 Sales @6.00 7.00 6.00 40 20 90 @6.00 5.5 Jan. 30 Purchase280 5.5 20 280 300 1540 Total 2690 1660 Therefore, Total cost of 130 units sold will be 820 and cost of remaining 300 units will be 1660d) Perpetual LIFO: Goods Purchased Cost of goods sold Inventory Balance Date Unit cost | # of units | Cost per | Sold Cost of # of units Sold 190 Cost perInventor Activity Units in unit Goods slod unit Balnce Jan. 1 1Opening 1330 Jan. 10 Sales 150 1050 40 Jan. 20 Purchase110 6 40 280 110 660 Sales 110 20 6.00 7.00 Jan. 25 660 20 7.00 140 140 @7.00 5.5 140 1540 1680 Jan. 30 Purchase 280 20 280 300 5.5 Total 1850 Therefore, Total cost of 130 units sold will be 800 and cost of remaining 300 units will be 1680

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