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. Date Activities Units Acquired at cost Units sold at Retail Jan, 1 Beginning inventory 100 units @ $10.50 - $1,890 n. le Sales 140 nits $19.50 Jan. 20 Purchase 110 units $ 9.50 1,045 Jan. 25 Sales 130 units @ $19.se Jan. 30 Purchase 260 units $9.00 2,340 Totais 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 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 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required Complete the table to determine the cost assigned to ending Inventory and cost of goods sold using specific identification (Round cost pe Specific Identification Available for Sale Cost of Goods Sold Units Sold COGS Purchase Date Activity Units Unit Cost Ending Inventory Ending Cost Per Ending Intory- terventory Unit Us Cost Jan 1 Jan 20 Jan 30 Beginning inventory Purchase Purchase 1807 5 10.50 110 260 550 5 0 Required 2 >

Answer 1

Perpetual inventory System: In this system, the cost of sales and invenries are updated on every sales and purchase transactions. Ans1: Specific Identification: This method refers the tracking and costing of inventory based on the movement of specific, identifiable inventory items in and out of stock. Specific Available for Sale Cost of Good Sold Perpetual Ending inventory -Perpetual Identification Activity No of Unit Unit Cost No of Unit Cost Per Unit COGS No of Unit Cost Per Unit Ending inventory Jan' 1 Beginning inventory 180 $10.50 165 $10.50 $1,732.50 15 $10.50 $157.50 Jan' 10 Purchase 110 $9.50 105 $9.50 $997.50 5 $9.50 $47.50 Jan' 20 Purchase 260 $9.00 260 $9.00 $2,340.00 Total 550 $29.00 270 $2,730.00 280 $2,545.00 Ans2: In weighted average cost method per unit purchase is derived by tal cost of goods available for sale divided by tal units of goods available at each transaction of sale or purchase Perpetual Purchase Cost of Good Sold Ending inventory Weighted No of Unit Cost Per Unit Total Cost No of Unit Cost Per Unit COGS No of Unit Cost Per Unit Ending inventory Jan' 1 $0.00 180 $10.50 $1,890.00 Jan' 10 140 $10.50 $1,470.00 40 $10.50 $420.00 Average 40 $10.50 $420.00 Jan' 20 110 $9.50 $1,045.00 40 $10.50 $420.00 110 $9.50 $1,045.00 Average 150 $9.77 $1,465.00 Jan' 25 130 $9.77 $1,270.00 20 $9.77 $195.00 20 Average Jan' 30 260 $9.00 $2,340.00 20 260 280 $9.77 $9.77 $9.00 $9.05 $195.00 $195.00 $2,340.00 $2,535.00 370 $3,385.00 270 $2,740.00 Total Ending inventory Cost 280 $2,535.00

Jan' 1 Ans3: 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 Purchase Cost of Good Sold Perpetual FIFO Ending inventory - Perpetual FIFO Cost of Good FIFO No of Unit Cost Per Unit Total Cost No of Unit Cost Per Unit No of Unit Cost Per Unit Ending inventory Sold $0.00 180 $10.50 $1,890.00 Jan'10 $0.00 140 $10.50 $1,470.00 40 $10.50 $420.00 Jan 20 110 $9.50 $1,045.00 $0.00 40 $10.50 $420.00 110 $9.50 $1,045.00 150 $1,465.00 Jan' 25 $0.00 40 $10.50 $420.00 20 $9.50 $190.00 90 $9.50 $855.00 130 $1,275.00 Jan' 30 260 $9.00 $2,340.00 20 $9.50 $190.00 260 $9.00 $2,340.00 280 $2,530.00 370 $3,385.00 270 $2,745.00 Total Ending inventory Cost 280 $2,530.00

Ans4: Last in, first out method (LIFO): In this method it is assumed that inventory which is purchased last will be sold first and the inventory will consist of old purchases. Purchase Cost of Good Sold Perpetual LIFO Perpetual Ending inventory -Perpetual LIFO Cost of Good LIFO No of Unit Cost Per Unit Total Cost No of Unit Cost Per Unit No of Unit Cost Per Unit Ending inventory Sold Jan'1 Jan' 10 $0.00 $0.00 180 40 $10.50 $10.50 140 $10.50 $1,470.00 Jan' 20 110 $9.50 $1,045.00 40 110 150 $10.50 $9.50 $1,890.00 $420.00 $420.00 $1,045.00 $1,465.00 $210.00 Jan' 25 $0.00 20 $10.50 1101 20 130 $9.50 $10.50 $1,045.00 $210.00 $1,255.00 20 $210.00 Jan' 30 2601 $9.00 $2,340.00 20 260 280 $10.50 $9.00 $210.00 $2,340.00 $2,550.00 370 $3,385.00 270 $2,725.00 Total Ending inventory Cost 280 $2,550.00