Question

On May 10, Hudson Computing sold 140 Millennium laptop computers to Apex Publishers. At the date of this sale, Hudson’s perpetual inventory records included the following cost layers for the Millennium laptops.

purchase date	quantity	unit cost	total cost
April 9	105	$1500	157500
May 1	45	$1600	72000
Total on hand	150		299500

Prepare journal entries to record the cost of the 140 Millennium laptops sold on May 10, assuming that Hudson Computing uses the following. (Round your final answers to the nearest dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

a. Specific identification method (97 of the units sold were purchased on April 9, and the remaining units were purchased on May 1).

b. Average-cost method.

c. FIFO method.

d. LIFO method.

Answer 1

Journal entries
Date	Accounts title and explanation				Debit $	Credit $
Case-1 Specific Identification					214300
a.	Cost of good ssold					214300
	Merchandise inventory (97*1500+43*1600)
Case-2 Average cost
a.	Cost of Goods sold				279533
	Merchandise inventory (299500/150)*140					279533
Case-3 FIFO
a.	Cost of goods sold				213500
	Merchandise inventory (105*1500+35*1600)					213500
Case-4 LIFO
a.	Cost of goods sold				214500
	Merchandise inventory (45*1600+95*1500)					214500