Question

It will be greatly appreciated if you can help me to do the following. Much thanks!

Laker Company reported the following January purchases and sales data for its only product. Date Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Activities Units Acquired at Cost 60 units $8.50 $1,360 00 units$7.50 750 220 units$7.00 1,540 Units Sold at Retail 120 units 120 units $17.50 $17.50 Totals 480 units $ 3,650 240 units

Answer 1

Ans c: First in, first out method (FIFO) In this method it is assumed that Inventory which is purchased first will be sold first and the inventory will consist of recent purchases. Perpetual FIFO: Goods Purchased Cost of Good Sold Inventory Balance Date Cost per Rate Cost per Cost of Cost per Inventory Rate Balance # of Units # of Units # of Units Rate Good Sold $0.00 120 $8.50 $1,020.00 $0.00 160 $8.50 $1,360.00 Jan'1 Jan 10 Jan'20 40$8.50 $340.00 100$7.50 40$8.50 $340.00 100 $7.50 $750.00 $1,090.00 140 40$8.50 $340.00 80 $7.50 $600.00 $940.00 Jan 25 20 $7.50 $150.00 120 $0.00 20 $7.50 $150.00 220 $7.00 $1,540.00 $1,690.00 Jan 30 220 $7.00 240 Total 320 240 $1,960.00 240 $1,690.00