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 Deginning Jenaventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Totals Units Acquired at Cost Units sold at Retail 240 units $16.50 $ 3.960 190 wita $25.50 170 units $15.50 - 2,635 190 units $25.50 380 units $15.00 - 5.700 790 units $12,295 380 wita Required: The Company uses a periodic inventory system. For specific identification, ending inventory consists of 410 units, where 380 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, (o) weighted average, (FIFO, and (LIFO. Complete this questions by entering your answers in the below tabs.

Answer 1

Ans. A	Specific identification	Cost of goods available for sale	Cost of goods sold	Ending inventory
		# of Units	Cost per	Cost of goods	# of units	Cost per	Cost of	# of Units in	Cost per	Ending
			Unit	Available for sale	Sold	Unit	Goods sold	Ending inventory	Unit	Inventory
	Beginning inventory	240	$16.50	$3,960	215	$16.50	$3,548	25	$16.50	$413
	Purchases:
	20-Jan	170	$15.50	$2,635	165	$15.50	$2,558	5	$15.50	$78
	30-Jan	380	$15.00	$5,700	0	$15.00	$0	380	$15.00	$5,700
	Total	790		$12,295	380		$6,105	410		$5,700
	Sold units = No. of units available on particular date - Ending inventory units on the same date.
	Purchase date	Units available (a)	Ending inventory (b)	Units sold (a - b)
	01-Jan	240	25	215
	20-Jan	170	5	165
	30-Jan	380	380	0
Ans. B	Average cost:	Cost of goods available for sale	Cost of goods sold	Ending inventory
		# of Units	Cost per	Cost of goods	# of units	Cost per	Cost of	# of Units in	Cost per	Ending
			Unit	Available for sale	Sold	Unit	Goods sold	Ending inventory	Unit	Inventory
	Beginning inventory	240	$16.50	$3,960
	Purchases:
	20-Jan	170	$15.50	$2,635
	30-Jan	380	$15.00	$5,700
	Total	790		$12,295	380	$15.56	$5,914	410	$15.56	$6,381
	Average cost per unit =   Total cost of goods available for sale / Units available for sale
	$12,295 / 790
	$15.56	per unit
Ans. C	FIFO:	Cost of goods available for sale	Cost of goods sold	Ending inventory
		# of Units	Cost per	Cost of goods	# of units	Cost per	Cost of	# of Units in	Cost per	Ending
			Unit	Available for sale	Sold	Unit	Goods sold	Ending inventory	Unit	Inventory
	Beginning inventory	240	$16.50	$3,960	240	$16.50	$3,960	0	$16.50	$0
	Purchases:							0
	20-Jan	170	$15.50	$2,635	140	$15.50	$2,170	30	$15.50	$465
	30-Jan	380	$15.00	$5,700	0	$15.00	$0	380	$15.00	$5,700
	Total	790		$12,295	380		$6,130	410		$6,165
	*In FIFO method the units that have purchased first, are released the first one and the ending inventory
	units remain from the last purchases.
Ans. D	LIFO:	Cost of goods available for sale	Cost of goods sold	Ending inventory
		# of Units	Cost per	Cost of goods	# of units	Cost per	Cost of	# of Units in	Cost per	Ending
			Unit	Available for sale	Sold	Unit	Goods sold	Ending inventory	Unit	Inventory
	Beginning inventory	240	$16.50	$3,960	0	$16.50	$0	240	$16.50	$3,960
	Purchases:							0
	20-Jan	170	$15.50	$2,635	0	$15.50	$0	170	$15.50	$2,635
	30-Jan	380	$15.00	$5,700	380	$15.00	$5,700	0	$15.00	$0
	Total	790		$12,295	380		$5,700	410		$6,595
	*In LIFO method the units that have purchased last, are released the first one and ending inventory units
	remain from the first purchase.