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. Units Acquired at Cost 140 units @ $6.00 = $ 840 Units sold at Retail 100 units @ $ 15 Date Activities Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Totals 60 units @ $5.00 = 300 80 units @ $ 15 180 units @ $4.50 = _ 810 380 units $1,950 180 units The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 200 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory.

Answer 1

Solutions:

Computation of ending inventory and cost of goods sold under Specific Identification
Purchase Date	Available for sale			Cost of goods sold			Ending Inventory
	Activity	Units	Unit Cost	Units sold	unit cost	COGS	Ending InventoryUnits	Cost per unit	Ending Inventory Cost
Jan 1	Beginning Inventory	140	$6.00	125	$6.00	$750.00	15	$6.00	$90.00
Jan 20	Purchase	60	$5.00	55	$5.00	$275.00	5	$5.00	$25.00
Jan 30	Purchase	180	$4.50	0	$4.50	$0.00	180	$4.50	$810.00
		380		180		$1,025.00	200		$925.00

Computation of ending inventory and COGS under Weighted Average Cost (Perpetual)
Date	Goods Purchased		Cost of Goods sold			Inventory Balance
	Units	Cost per unit	Units	Cost per unit	COGS	Units	Cost per unit	Inventory Balance
Jan 1						140	$6.00	$840
Jan 10			100	$6.00	$600	40	$6.00	$240
Jan 20	60	$5.00				40	$6.00	$240
						60	$5.00	$300
Average Cost						100	$5.40	$540
Jan 25			80	$5.40	$432	20	$5.40	$108
Jan 30	180	$4.50				20	$5.40	$108
						180	$4.50	$810
Total			180		$1,032	200	$4.59	$918

Computation of ending inventory and Cost of Goods sold under FIFO (Perpetual)
Date	Goods Purchased		Cost of goods sold			Inventory Balance
	Units	Cost per unit	Units	Cost per unit	COGS	Units	Cost per unit	Inventory Balance
1-Jan						140	$6.00	$840.00
10-Jan			100	$6.00	$600.00	40	$6.00	$240.00
20-Jan	60	$5.00				40	$6.00	$240.00
						60	$5.00	$300.00
25-Jan			40	$6.00	$240.00	20	$5.00	$100.00
			40	$5.00	$200.00
30-Jan	180	$4.50				20	$5.00	$100.00
						180	$4.50	$810.00
Total			180		$1,040.00	200		$910.00
Computation of ending inventory and Cost of Goods sold under LIFO (Perpetual)
Date	Goods Purchased		Cost of goods sold			Inventory Balance
	Units	Cost per unit	Units	Cost per unit	COGS	Units	Cost per unit	Inventory Balance
1-Jan						140	$6.00	$840.00
10-Jan			100	$6.00	$600.00	40	$6.00	$240.00
20-Jan	60	$5.00				40	$6.00	$240.00
						60	$5.00	$300.00
25-Jan			60	$5.00	$300.00	20	$6.00	$120.00
			20	$6.00	$120.00
30-Jan	180	$4.50				20	$6.00	$120.00
						180	$4.50	$810.00
Total			180		$1,020.00	200		$930.00