Question

Required information The folowing information applies to the questions displayed beiow Laker Company reported the folowing January purchases and sales data for its only product Units ao1d at Unita Acquired at Cost Date Activities Retail Beginning inventory 185 unita8S11.00-2,035 Jan. Jan. 10 Salen 145 unita$20.00 100 unita$10.00 1,000 Jan. 20 Purchase Jan. 25 Sales 125 unita$20.00 270 unita $ 9.50 2,565 Jan. 30 Purchase 555 unita $5,600 270 units Totala The Company uses a perpetual inventory system. For specific identification, ending Inventory consists of 285 units, where 270 are from the January 30 purchase, 5 are from the January 20 purchase, and 10 are from beginning inventory Required: 1. Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specitic ident fication. 2. Determine the cost assigned to ending inventory and to cost of goods soid 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 Complete this questions by entering your answers in the below tabs Required Required Required Required 2 3 4 Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification

Answer 1

Ans. 1	Specific identification:
		Available for sale				Cost of goods sold			Ending inventory
	Purchase date	Activity	Units	Rate	Cost	Units	Rate	Cost	Units	Rate	Cost
	1-Jan	Beginning inventory	185	$11.00	$2,035	175	$11.00	$1,925	10	$11.00	$110
	20-Jan	Purchases	100	$10.00	$1,000	95	$10.00	$950	5	$10.00	$50
	30-Jan	Purchases	270	$9.50	$2,565	0	$9.50	$0	270	$9.50	$2,565
	Total		555		$5,600	Cost of goods sold		$2,875	Ending inventory		$2,725
	Sold units = No. of units available on particular date - Ending inventory units on the same date.
	Purchase date	Units available (a)	Ending inventory (b)		Units sold (a - b)
	1-Jan	185	10		175
	20-Jan	100	5		95
	30-Jan	270	270		0
Ans. 2	Weighted Average (Perpetual)
	Purchase				Cost of goods sold			Balance
	Date	Quantity	Rate	Total cost	Quantity	Rate	Total cost	Quantity	Rate	Total cost
	1-Jan	185	$11.00	$2,035				185	$11.00	$2,035
	10-Jan				145	$11.00	$1,595	40	$11.00	$440
	20-Jan	100	$10.00	$1,000				140	$10.29	1440
	25-Jan				125	$10.29	$1,286	15	$10.29	$154
	30-Jan	270	$9.50	$2,565				285	$9.54	$2,719
	Total				Cost of goods sold		$2,881	Cost of Ending inventory		$2,719
	*Weighted average rate is calculated by using the formula of (Total available balance / Total units available).
Ans. 3	FIFO Perpetual:
	Purchase				Cost of goods sold			Balance
	Date	Quantity	Rate	Total cost	Quantity	Rate	Total cost	Quantity	Rate	Total cost
	1-Jan	185	$11.00	$2,035				185	$11.00	$2,035
	10-Jan				145	$11.00	$1,595	40	$11.00	$440
	20-Jan	100	$10.00	$1,000				40	$11.00	$440
								100	$10.00	$1,000
	25-Jan				40	$11.00	$440
					85	$10.00	$850	15	$10.00	$150
	30-Jan	270	$9.50	$2,565				15	$10.00	$150
								270	$9.50	$2,565
	Total				Cost of goods sold		$2,885	Cost of Ending inventory		$2,715
	*In FIFO method the units that have purchased first, are released the first one and the ending inventory
	units remain from the last purchases.
Ans. 4	Perpetual LIFO:
	Purchase				Cost of goods sold			Balance
	Date	Quantity	Rate	Total cost	Quantity	Rate	Total cost	Quantity	Rate	Total cost
	1-Jan	185	$11.00	$2,035				185	$11.00	$2,035
	10-Jan				145	$11.00	$1,595	40	$11.00	$440
	20-Jan	100	$10.00	$1,000				40	$11.00	$440
								100	$10.00	$1,000
	25-Jan				100	$10.00	$1,000
					25	$11.00	$275	15	$11.00	$165
	30-Jan	270	$9.50	$2,565				15	$11.00	$165
								270	$9.50	$2,565
	Total				Cost of goods sold		$2,870	Cost of Ending inventory		$2,730
	*In LIFO method the units that have purchased last, are released the first one and the ending inventory
	units remain from the first purchases.