Question

Laker Company reported the following January purchases and sales data for its only product Units Acquired at Cost 185 units $11.00 = $2,035 Date Activities Units sold at Retail 1 Beginning inventory Jan. Jan. 10 Sales 145 units @ $20.00 100 units@ $10.00 = Jan. 20 Purchase 1,000 125 units @ $20.00 Jan. 25 Sales 270 units@ $9.50 = Jan. 30 Purchase 2,565 555 units $5,600 270 units Totals The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 285 units, where 270 are from the January 30 purchase, 5 are from the January 20 purchase, and 10 are from beginning inventory.

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.

Answer 1

Solution 1:

Computation of COGS and ending inventory - Specific identification
Particulars	Cost of goods available for sale			Cost of goods sold			Ending Inventory
	Nos of units	Unit Cost	Cost of goods available for sale	Nos of units sold	Unit Cost	Cost of goods sold	Nos of units in ending inventory	Unit Cost	Ending inventory
Beginning inventory	185	$11.00	$2,035	175	$11.00	$1,925.00	10	$11.00	$110.00
Purchases:
20-Jan	100	$10.00	$1,000	95	$10.00	$950.00	5	$10.00	$50.00
30-Jan	270	$9.50	$2,565	0	$9.50	$0.00	270	$9.50	$2,565.00
Total	555		$5,600	270		$2,875.00	285		$2,725.00

Solution 2:

Computation of ending inventory COGS under Weighted Average Cost - Laker Company
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	185	$11.00	$2,035	0	$0.00	$0	0	$0.00	$0	185	$11.00	$2,035
10-Jan	185	$11.00	$2,035	0	$0.00	$0	145	$11.00	$1,595	40	$11.00	$440
20-Jan	40	$11.00	$440	100	$10.00	$1,000	0	$0.00	$0	140	$10.29	$1,440
25-Jan	140	$10.29	$1,440	0	$0.00	$0	125	$10.29	$1,286	15	$10.29	$154
25-Mar	15	$10.29	$154	270	$9.50	$2,565	0	$0.00	$0	285	$9.54	$2,719
Total							270		$2,881	285		$2,719

Solution 3:

Computation of ending inventory COGS under FIFO - Laker Company
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	185	$11.00	$2,035.00	0	$0.00	$0.00	0	$0.00	$0.00	185	$11.00	$2,035.00
10-Jan	185	$11.00	$2,035.00	0	$0.00	$0.00	145	$11.00	$1,595.00	40	$11.00	$440.00
20-Jan	40	$11.00	$440.00	100	$10.00	$1,000.00	0	$0.00	$0.00	40	$11.00	$440.00
										100	$10.00	$1,000.00
25-Jan	40	$11.00	$440.00	0	$0.00	$0.00	40	$11.00	$440.00	15	$10.00	$150.00
	100	$10.00	$1,000.00				85	$10.00	$850.00
30-Jan	15	$10.00	$150.00	270	$9.50	$2,565.00	0	$0.00	$0.00	15	$10.00	$150.00
										270	$9.50	$2,565.00
Total							270		$2,885.00	285		$2,715.00

Solution 4:

Computation of ending inventory COGS under LIFO - Laker Company
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	185	$11.00	$2,035.00	0	$0.00	$0.00	0	$0.00	$0.00	185	$11.00	$2,035.00
10-Jan	185	$11.00	$2,035.00	0	$0.00	$0.00	145	$11.00	$1,595.00	40	$11.00	$440.00
20-Jan	40	$11.00	$440.00	100	$10.00	$1,000.00	0	$0.00	$0.00	40	$11.00	$440.00
										100	$10.00	$1,000.00
25-Jan	40	$11.00	$440.00	0	$0.00	$0.00	100	$10.00	$1,000.00	15	$11.00	$165.00
	100	$10.00	$1,000.00				25	$11.00	$275.00
30-Jan	15	$11.00	$165.00	270	$9.50	$2,565.00	0	$0.00	$0.00	15	$11.00	$165.00
										270	$9.50	$2,565.00
Total							270		$2,870.00	285		$2,730.00