Question

Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.) Laker Company reported the following January purchases and sales data for its only product. Units Acquired at Cost 155 units @ $8.00 = $1,240 Units sold at Retail 115 units @ $17.00 Date Activities Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Totals 90 units @ $7.00 = 630 95 units @ $17.00 210 units @ $6.50 = 455 units 1,365 $3,235 210 units The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 245 units, where 210 are from the January 30 purchase, 5 are from the January 20 purchase, and 30 are from beginning inventory. Exercise 5-3 Perpetual: Inventory costing methods LO P1 equired: - Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification. -. Determine the cost assigned to ending inventory and to cost of goods sold using weighted average. . Determine the cost assigned to ending inventory and to cost of goods sold using FIFO. -. Determine the cost assigned to ending inventory and to cost of goods sold using LIFO.

Answer 1

Specific Identification method:
Cost assigned to ending inventory:
				$
Jan 30. purchase		210 units at $ 6.50		1365
Jan 20. purchase		5 units at $ 7		35
Beginning inventory		30 units at $ 8		240
Total				1640
Cost of goods sold=Beginning inventory+Purchases-Ending inventory=1240+3235-1640=$ 2835
Weighted average method:
Under weighted average inventory method,Inventory is valued at weighted average cost per unit
Weighted average cost per unit=Total cost/Total quantity
	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
Jan 1.						155	8	1240
Jan 10.			115	8	920	40	8	320
						(155-115)
Jan 20.	90	7				40	8	320
						90	7	630
Average cost						130	7.31	950
							(950/130)
Jan 25.			95	7.31	694.45	35	7.31	255.85
						(130-95)
Jan 30.	210	6.5				35	7.31	255.85
						210	6.5	1365
Average cost						245	6.62	1620.85
							(1620.85/245)
Total					1614.45
Cost assigned to ending inventory=$ 1620.85
Cost of goods sold=$ 1614.45
Under FIFO method,Goods purchased first are sold first.
	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
Jan 1.						155	8	1240
Jan 10.			115	8	920	40	8	320
						(155-115)
Jan 20.	90	7				40	8	320
						90	7	630
Jan 25.			95 units sold as follows
			40	8	320	35	7	245
			55	7	385	(90-55)
			(95-40)
Jan 30.	210	6.5				35	7	245
						210	6.5	1365
Total					1625
Cost assigned to ending inventory=245+1365=$ 1610
Cost of goods sold=$ 1625
Under LIFO method,Goods purchased last are sold first.
	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
Jan 1.						155	8	1240
Jan 10.			115	8	920	40	8	320
						(155-115)
Jan 20.	90	7				40	8	320
						90	7	630
Jan 25.			95 units sold as follows
			90	7	630	35	8	280
			5	8	40	(40-5)
			(95-90)
Jan 30.	210	6.5				35	8	280
						210	6.5	1365
Total					1590			1645
Cost assigned to ending inventory=280+1365=$ 1645
Cost of goods sold=$ 1590