Question

Laker Company reported the following January purchases and sales data for its only product.

Date			Activities	Units Acquired at Cost								Units sold at Retail
Jan.	1		Beginning inventory	190	units	@	$	7.00	=	$	1,330
Jan.	10		Sales										150	units	@	$	16.00
Jan.	20		Purchase	110	units	@	$	6.00	=		660
Jan.	25		Sales										130	units	@	$	16.00
Jan.	30		Purchase	280	units	@	$	5.50	=		1,540
			Totals	580	units					$	3,530		280	units

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.

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.

	Specific Identification Available for Sale Cost of Goods Sold Ending Inventory Purchase Date Activity Units Unit Cost Units Sold Unit Cost COGS Ending Inventory- Units Cost Per Unit Ending Inventory- Cost Jan. 1 Beginning inventory 190 Jan. 20 Purchase 110 Jan. 30 Purchase 280 580 0 $0 0 $0

	Weighted Average - Perpetual: 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 January 1 190 @ $7.00 = $1,330.00 January 10 January 20 Average cost January 25 January 30 Totals

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	190	$7.00	$1,330	175	$7.00	$1,225.00	15	$7.00	$105.00
Purchases:
20-Jan	110	$6.00	$660	105	$6.00	$630.00	5	$6.00	$30.00
30-Jan	280	$5.50	$1,540	0	$5.50	$0.00	280	$5.50	$1,540.00
Total	580		$3,530	280		$1,855.00	300		$1,675.00

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	190	$7.00	$1,330	0	$0.00	$0	0	$0.00	$0	190	$7.00	$1,330
10-Jan	190	$7.00	$1,330	0	$0.00	$0	150	$7.00	$1,050	40	$7.00	$280
20-Jan	40	$7.00	$280	110	$6.00	$660	0	$0.00	$0	150	$6.27	$940
25-Jan	150	$6.27	$940	0	$0.00	$0	130	$6.27	$815	20	$6.27	$125
25-Mar	20	$6.27	$125	280	$5.50	$1,540	0	$0.00	$0	300	$5.55	$1,665
Total							280		$1,865	300		$1,665

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	190	$7.00	$1,330.00	0	$0.00	$0.00	0	$0.00	$0.00	190	$7.00	$1,330.00
10-Jan	190	$7.00	$1,330.00	0	$0.00	$0.00	150	$7.00	$1,050.00	40	$7.00	$280.00
20-Jan	40	$7.00	$280.00	110	$6.00	$660.00	0	$0.00	$0.00	40	$7.00	$280.00
										110	$6.00	$660.00
25-Jan	40	$7.00	$280.00	0	$0.00	$0.00	40	$7.00	$280.00	20	$6.00	$120.00
	110	$6.00	$660.00				90	$6.00	$540.00
30-Jan	20	$6.00	$120.00	280	$5.50	$1,540.00	0	$0.00	$0.00	20	$6.00	$120.00
										280	$5.50	$1,540.00
Total							280		$1,870.00	300		$1,660.00

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	190	$7.00	$1,330.00	0	$0.00	$0.00	0	$0.00	$0.00	190	$7.00	$1,330.00
10-Jan	190	$7.00	$1,330.00	0	$0.00	$0.00	150	$7.00	$1,050.00	40	$7.00	$280.00
20-Jan	40	$7.00	$280.00	110	$6.00	$660.00	0	$0.00	$0.00	40	$7.00	$280.00
										110	$6.00	$660.00
25-Jan	40	$7.00	$280.00	0	$0.00	$0.00	110	$6.00	$660.00	20	$7.00	$140.00
	110	$6.00	$660.00				20	$7.00	$140.00
30-Jan	20	$7.00	$140.00	280	$5.50	$1,540.00	0	$0.00	$0.00	20	$7.00	$140.00
										280	$5.50	$1,540.00
Total							280		$1,850.00	300		$1,680.00