Question

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.

Date			Activities	Units Acquired at Cost								Units sold at Retail
Jan.	1		Beginning inventory	210	units	@	$	13.50	=	$	2,835
Jan.	10		Sales										160	units	@	$	22.50
Jan.	20		Purchase	150	units	@	$	12.50	=		1,875
Jan.	25		Sales										180	units	@	$	22.50
Jan.	30		Purchase	320	units	@	$	12.00	=		3,840
			Totals	680	units					$	8,550		340	units

The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 340 units, where 320 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory.

Exercise 5-3 Perpetual: Inventory costing methods LO P1

Determine the cost assigned to ending inventory and to cost of goods sold using LIFO. (Round cost per unit to 2 decimal places.)

	Perpetual LIFO: 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 1 210 @ $13.50 = $2,835.00 January 10 January 20 January 25 January 30 Totals

Answer 1

Correct Answer:

Perpetual Inventory Method
LIFO
	Purchases			Sales			Balance
	Units	Rate	Amount	Units	Rate	Amount	Units	Rate	Amount
Beginning Inventory							210	$                   13.50	$          2,835.00
10-Jan				160	$         13.50	$               2,160.00	50	$                   13.50	$              675.00
									$                       -
20-Jan	150.00	$ 12.50	$            1,875.00				150	$                   12.50	$          1,875.00
							50	$                   13.50	$              675.00
									$                       -
27-Jan				150	$         12.50	$               1,875.00			$                       -
				30	$         13.50	$                   405.00	20	$                   13.50	$              270.00
									$                       -
30-Jan	320.00	12	$            3,840.00				320	$                   12.00	$          3,840.00
							20	$                   13.50	$              270.00
Total
Total cost of goods sold				340		$               4,440.00
Ending inventory							340		$          4,110.00

End of answer.

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