Question

Alta Ski Company's inventory records contained the following information regarding its latest ski model. The company uses a periodic inventory system.
 

Beginning inventory, January 1, 2021	1,450	units @ $65 each
Purchases:
January 15	3,000	units @ $80 each
January 21	2,800	units @ $85 each
Sales:
January 5	1,400	units @ $105 each
January 22	1,800	units @ $115 each
January 29	1,250	units @ $120 each
Ending inventory, January 31, 2021	2,800	units

 
Required:

1. 1a. Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January 2021?

2. 1b. Which method will result in the highest ending inventory balance?

3. 2. Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods.

4. 3a. Assume that inventory costs were declining during January. The inventory purchased on January 15 had a unit cost of $55, and the inventory purchased on January 21 had a unit cost of $50. All other information is the same. Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January 2021?

5. 3b. Which method will result in the highest ending inventory balance?

6. 3c. Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods.