Question

Alta Ski Company's inventory records contained the following information regarding its latest ski model. The company uses a periodic inventory system. 650 units @ $75 each 1,400 units @ $90 each 1,200 units @ $95 each Beginning inventory, January 1, 2021 Purchases: January 15 January 21 Sales: January 5 January 22 January 29 Ending inventory, January 31, 2021 600 units @ $115 each 1,eee units @ $125 each 450 units $130 each 1,200 units Required: 10. Which method. FIFO or LIFO, will result in the highest cost of goods sold figure for January 2021? 1b. Which method will result in the highest ending inventory balance? 2. Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods. 30. Assume that inventory costs were declining during January. The inventory purchased on January 15 had a unit cost of $65. and the inventory purchased on January 21 had a unit cost of $60. All other information is the same. Which method, FIFO or LIFO. will result in the highest cost of goods sold figure for January 2021? 3b. Which method will result in the highest ending inventory balance? 3c. Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods.

Answer 1

Req 1A and 1B LIFO 1 a. 1 b. Highest Cost of Goods sold figure Highest Ending inventory balance FIFO Req 2 FIFO Cost of Goods Available for sale Cost of Goods # of units Cost per unit avail for sale 650 $ 75 $ 48,750 Cost of Goods sold - Periodic FIFO Cost of Goods sold - Periodic FIFO Cost of Goods # of units in Ending # of units Cost per unit avail for sale Inventory Cost per unit Inventory 650 $ 75$ 48,750 Beginning Inventory Purchases : January 15 January 21 Total 1400 $ 90 1400 $ 90 $ 1,26,000 $ $ 95 1,26,000 1,14,000 2,88,750 1200 $ 3250 1200 $ 95$ $ 1,14,000 1,14,000 $ $ 1,74,750 LIFO Cost of Goods Available for sale Cost of Goods # of units Cost per unit avail for sale 650 $ 75$ 48,750 Cost of Goods sold - Periodic LIFO Cost of Goods sold - Periodic LIFO Cost of Goods # of units in Ending # of units Cost per unit avail for sale Inventory Cost per unit Inventory 650 $ 75$ 48,750 Beginning Inventory Purchases : January 15 January 21 Total 550 $ 90 $ 49,500 1400 $ 1200 $ 90 $ 95 $ $ 1,26,000 1,14,000 2,88,750 850 $ 1200 $ 90 $ 95 $ $ 76,500 1,14,000 1,90,500 3250 $ 98,250

In case of any doubts or issues, please do comment below

Req 3A and 3B 3 a. 3 b. Highest Cost of Goods sold figure Highest Ending inventory balance FIFO LIFO Req 3C FIFO Cost of Goods Available for sale Cost of Goods # of units Cost per unit avail for sale 650 $ 75 $ 48,750 Cost of Goods sold - Periodic FIFO Cost of Goods sold - Periodic FIFO Cost of Goods # of units in Ending # of units Cost per unit avail for sale Inventory Cost per unit Inventory 650 $ 75 $ 48,750 Beginning Inventory Purchases : January 15 January 21 Total 65 $ 1400 $ 65 $ 91,000 1400 $ 1200 $ 3250 60 91,000 72,000 2,11,750 $ $ 1200 $ 60 $ $ 72,000 72,000 $ 1,39,750 LIFO Cost of Goods Available for sale Cost of Goods # of units Cost per unit avail for sale 650 $ 75$ 48,750 Cost of Goods sold - Periodic LIFO Cost of Goods sold - Periodic LIFO Cost of Goods # of units in Ending # of units Cost per unit avail for sale Inventory Cost per unit Inventory 650 $ 75$ 48,750 Beginning Inventory Purchases : January 15 January 21 Total 65 S 850 $ 65 $ 550 $ 65 S 35,750 1400 $ 1200 $ 3250 60 $ 91,000 72,000 2,11,750 1200 $ 60 $ $ 55,250 72,000 1,27,250 $ $ 84,500