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 sold at Retail Units Acquired at Cost 225 units@ $15.00 = $ 3,375 175 units @ $24.00 Date Activities Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Totals 180 units@ $14.00 = 2,520 210 units @ $24.00 350 units@ $13.50 = 755 units 4,725 $10,620 385 units The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 370 units, where 350 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory. Exercise 6-3 Perpetual: Inventory costing methods LO P1 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.

Answer 1

Solution 1:

Computation of COGS and ending inventory - Specific identification
Particulars	Cost of goods available for sale			Cost of goods sold			Ending Inventory
	Nos of units	Unit Cost	Cost of goods available for sale	Nos of units sold	Unit Cost	Cost of goods sold	Nos of units in ending inventory	Unit Cost	Ending inventory
Beginning inventory	225	$15.00	$3,375	210	$15.00	$3,150.00	15	$15.00	$225.00
Purchases:
20-Jan	180	$14.00	$2,520	175	$14.00	$2,450.00	5	$14.00	$70.00
30-Jan	350	$13.50	$4,725	0	$13.50	$0.00	350	$13.50	$4,725.00
Total	755		$10,620	385		$5,600.00	370		$5,020.00

Solution 2:

Computation of ending inventory COGS under Weighted Average Cost - Laker Company
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	225	$15.00	$3,375	0	$0.00	$0	0	$0.00	$0	225	$15.00	$3,375
10-Jan	225	$15.00	$3,375	0	$0.00	$0	175	$15.00	$2,625	50	$15.00	$750
20-Jan	50	$15.00	$750	180	$14.00	$2,520	0	$0.00	$0	230	$14.22	$3,270
25-Jan	230	$14.22	$3,270	0	$0.00	$0	210	$14.22	$2,986	20	$14.22	$284
25-Mar	20	$14.22	$284	350	$13.50	$4,725	0	$0.00	$0	370	$13.54	$5,009
Total							385		$5,611	370		$5,009

Solution 3:

Computation of ending inventory COGS under FIFO - Laker Company
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	225	$15.00	$3,375.00	0	$0.00	$0.00	0	$0.00	$0.00	225	$15.00	$3,375.00
10-Jan	225	$15.00	$3,375.00	0	$0.00	$0.00	175	$15.00	$2,625.00	50	$15.00	$750.00
20-Jan	50	$15.00	$750.00	180	$14.00	$2,520.00	0	$0.00	$0.00	50	$15.00	$750.00
										180	$14.00	$2,520.00
25-Jan	50	$15.00	$750.00	0	$0.00	$0.00	50	$15.00	$750.00	20	$14.00	$280.00
	180	$14.00	$2,520.00				160	$14.00	$2,240.00
30-Jan	20	$14.00	$280.00	350	$13.50	$4,725.00	0	$0.00	$0.00	20	$14.00	$280.00
										350	$13.50	$4,725.00
Total							385		$5,615.00	370		$5,005.00

Solution 4:

Computation of ending inventory COGS under LIFO - Laker Company
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	225	$15.00	$3,375.00	0	$0.00	$0.00	0	$0.00	$0.00	225	$15.00	$3,375.00
10-Jan	225	$15.00	$3,375.00	0	$0.00	$0.00	175	$15.00	$2,625.00	50	$15.00	$750.00
20-Jan	50	$15.00	$750.00	180	$14.00	$2,520.00	0	$0.00	$0.00	50	$15.00	$750.00
										180	$14.00	$2,520.00
25-Jan	50	$15.00	$750.00	0	$0.00	$0.00	180	$14.00	$2,520.00	20	$15.00	$300.00
	180	$14.00	$2,520.00				30	$15.00	$450.00
30-Jan	20	$15.00	$300.00	350	$13.50	$4,725.00	0	$0.00	$0.00	20	$15.00	$300.00
										350	$13.50	$4,725.00
Total							385		$5,595.00	370		$5,025.00