Question

Required information 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. Units sold at Retail Units Acquired at Cost 220 units @ $14.50 = $3,190 170 units @ $23.50 Date Activities Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Totals 170 units@ $13.50 = 2,295 200 units @ $23.50 340 units@ $13.00 = 730 units 4,420 $ 9,905 370 units The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 360 units, where 340 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 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.

Answer 1

2. WEIGHTED AVERAGE:

Weighted average: Inventory balance No. of Cost units per unit Inventory balance of Date Goods purchased Cost of goods sold No. of CostNo. of Cost Cost units per units per unit unit goods sold Jan 1 Jan 10 | 170 $14.5 $2465 Jan 20170 $13.5 220 50 50 220 200 Jan 25 $13.73 $2746 $14.5 $14.5 $14.5 $13.5 $13.73 $13.73 $13.73 $13 $13.04 $13.04 20 20 $3190 $725 $725 $2295 $3020 $274 $274 $4420 $4694 $4694 Jan 30 | 340 340 360 $5211 360 Totals

COST OF GOODS SOLD = $5211 ENDING INVENTORY BALANCE = $4694 Calculations of weighted average cost per unit: As on Jan 20: weighted average cost per unit = $3020/220 = $13.73 As on Jan 30: weighted average cost per unit = $4694/360 = $13.04

3. FIFO:

FIFO: Date Goods purchased No. of Cost units per unit Inventory balance of per unit Jan 1 Jan 10 Jan 20170 $13.5 Cost of goods sold Inventory balance No. of Cost Cost No. of Cost units per units goods unit sold 220 $14.5 170 $14.5 $2465 50 $14.5 50 $14.5 170 $13.5 220 50 $14.5 $725 20 $13.5 150 $13.5 $2025 20 $13.5 340 360 $5215360 $3190 $725 $725 $2295 $3020 $270 Jan 25 Jan 30 | 340 $13 $13 $270 $4420 $4690 $4690 Totals COST OF GOODS SOLD = $5215 ENDING INVENTORY BALANCE = $4690

4. LIFO:

LIFO: Goods purchased No. of Cost units per unit Inventory balance of Jan 1 Jan 10 Jan 20170 $13.5 Cost of goods sold Inventory balance No. of Cost Cost No. of Cost units per units per unit goods unit sold 220 $14.5 170 $14.5 $2465 50 $14.5 50 $14.5 170 $13.5 220 170 $13.5 $229520 $14.5 30 $14.5 $435 20 $14.5 T 340 $13 360 $5195 360 $3190 $725 $725 $2295 $3020 $290 Jan 25 Jan 30 340 $13 AT $290 $4420 $4710 $4710 Totals COST OF GOODS SOLD = $5195 ENDING INVENTORY BALANCE = $4710