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. Date Units sold at Activities whits Aequired at copt Beginning 100 units $10.50 =$1,890 Jan. Inventory Jan. 10 Sales 140 units $19.50 Jan. 20 Purchase 110 units$ 9.50 - 1,045 Jan. 25 Sales 130 units $19.50 Jan. 30 Purchase 260 unitats 9.00 - 2,340 Totala 550 units $5,275 270 units The Company uses a perpetual Inventory system. For specific identification, ending inventory consists of 280 units, where 260 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory. 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. Complete this question by entering your answers in the tabs below. Required Required Required Required Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification. (Round cost per unit to 2 decimal places.) Specific identification Available for Sale Cost of Goods Sold Ending Inventory Ending Purchase Ending Cost Activity - Units Unit Units Unit unit units Unit ce COGS inventory Per Inventory Date Activity units Cost Sold Cost Units Unit Cost Jan. 1 Beginning 180 Inventory Jan 20 Purchase 110 Jan. 30 Purchase 12601 550 Required 2 >

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
	01-Jan	Beginning inventory	180	$10.50	$1,890	165	$10.50	$1,733	15	$10.50	$158
	20-Jan	Purchases	110	$9.50	$1,045	105	$9.50	$998	5	$9.50	$48
	30-Jan	Purchases	260	$9.00	$2,340	0	$9.00	$0	260	$9.00	$2,340
	Total		550		$5,275	Cost of goods sold		$2,730	Ending inventory		$2,545
	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)
	01-Jan	180	15		165
	20-Jan	110	5		105
	30-Jan	260	260		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
	01-Jan	180	$10.50	$1,890				180	$10.50	$1,890
	10-Jan				140	$10.50	$1,470	40	$10.50	$420
	20-Jan	110	$9.50	$1,045				150	$9.77	1465
	25-Jan				130	$9.77	$1,270	20	$9.77	$195
	30-Jan	260	$9.00	$2,340				280	$9.05	$2,535
	Total				Cost of goods sold		$2,740	Cost of Ending inventory		$2,535
	*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
	01-Jan	180	$10.50	$1,890				180	$10.50	$1,890
	10-Jan				140	$10.50	$1,470	40	$10.50	$420
	20-Jan	110	$9.50	$1,045				40	$10.50	$420
								110	$9.50	$1,045
	25-Jan				40	$10.50	$420
					90	$9.50	$855	20	$9.50	$190
	30-Jan	260	$9.00	$2,340				20	$9.50	$190
								260	$9.00	$2,340
	Total				Cost of goods sold		$2,745	Cost of Ending inventory		$2,530
	*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
	01-Jan	180	$10.50	$1,890				180	$10.50	$1,890
	10-Jan				140	$10.50	$1,470	40	$10.50	$420
	20-Jan	110	$9.50	$1,045				40	$10.50	$420
								110	$9.50	$1,045
	25-Jan				110	$9.50	$1,045
					20	$10.50	$210	20	$10.50	$210
	30-Jan	260	$9.00	$2,340				20	$10.50	$210
								260	$9.00	$2,340
	Total				Cost of goods sold		$2,725	Cost of Ending inventory		$2,550
	*In LIFO method the units that have purchased last, are released the first one and the ending inventory
	units remain from the first purchases.