Question

Check my work Units Acquired at Cost 230 units $15.50 - $ 3,565 Units sold at Retail 188 units @ $24.50 Date Activities Jan. 1 Beginning inventory Jan. 1e Sales Jan. 20 Purchase Jan. 25 Sales Jan. 3e Purchase Totals 190 units @ $14.50 - 2,755 220 units @ $24.50 360 units@ $14.00 = 788 units 5,840 $11,360 4ee units The Company uses a perpetual inventory system For specific identification, ending inventory consists of 380 units, where 360 are from the January 30 purchase, 5 are from the Janualy 20 purchase, and 15 are from beginning Inventory

Answer 1

LAKER COMPANY

Income Statement

For month ended January 31

	Specific identification	Weighted average	FIFO	LIFO
Sales	$9800	$9800	$9800	$9800
Cost of good sold	$6015	$5824	$6030	$6010
Gross Profit	$3785	$3976	$3770	$3790
Expenses	$2150	$2150	$2150	$2150
Income before taxes	$1635	$1826	$1620	$1640
Income Tax expense(40% of Income before taxes)	$654	$730.40	$648	$656
Net Income	$981	$1095.6	$972	$984

Working note:-

1:- Sales= 180 units X $24.50 + 220 units X $24.50 =$ 9800

2:-a):-Cost of good sold under specific identification= Total cost - cost of ending inventory

= $ 11360 - (360 units X $14 +5 units X $14.5 +15 units X $15.50)

=$11360 -$5345 =$6015

b):- Cost of good sold under weighted average method= No. Of units sold X average cost per unit

= (180+220) units X ($11360/780 units) =400 units X $14.56 =$5824

c):- Cost of good sold under FIFO = Total Cost - Cost of ending inventory= $11360 - (20 units X $14.50 + 360 units X $14 ) =$11360 - $5330=$6030

d):- Cost of good sold under LIFO = Total cost - Cost of ending inventory= $11360 - (20 units X $15.50 +360 units X $14)= $11360-$5350=$6010

last sales has been made on jan 25 . Due this this purchases of jan 30 are included in ending inventory because it can't be the part of any sales because all sales are made before Jan 30.