Question

# 1. Lauer Corporation uses the periodic inventory system and has provided the following information about one...

1.

Lauer Corporation uses the periodic inventory system and has provided the following information about one of its laptop computers:

 Date Transaction Number of Units Cost per Unit 1/1 100 \$800 5/5 Purchase 200 \$900 8/10 Purchase 300 \$1,000 10/15 Purchase 200 \$1,100

During the year, Lauer sold 750 laptop computers.

(a) What was ending inventory and cost of goods sold using the FIFO cost flow assumption?

(b) What was ending inventory and cost of goods sold using the LIFO cost flow assumption?

(c) What is ending inventory and cost of goods sold using the average cost method?

 FIFO LIFO Weighted Average Cost of Ending Inventory \$       55,000 \$      40,000 \$            48,750.0 Cost of Goods Sold \$   7,25,000 \$   7,40,000 \$        7,31,250.0

Working:

 Cost of Goods Available for sale Units Cost per unit value Beginning Inventory 100 \$      800.00 \$            80,000.0 Purchases 200 \$      900.00 \$        1,80,000.0 Purchases 300 \$         1,000 \$      3,00,000.00 Purchases 200 \$         1,100 \$        2,20,000.0 Total 800 \$            7,80,000
 FIFO A Total Units Available for sale 800 \$            7,80,000 Units Sold 750 Ending Inventory Units 50 Valuation Cost of Goods Sold 100 \$                800.00 \$         80,000.00 200 \$                900.00 \$            1,80,000 300 \$            1,000.00 \$      3,00,000.00 150 \$            1,100.00 \$      1,65,000.00 B Cost of Goods Sold 750 units \$            7,25,000 A-B Ending Inventory 50 units \$               55,000
 LIFO A Total Units Available for sale 800 \$            7,80,000 Units Sold 750 Ending Inventory Units 50 Valuation Cost of Goods Sold 200 \$            1,100.00 2,20,000.00 300 \$            1,000.00 3,00,000.00 200 \$                900.00 1,80,000.00 50 \$                800.00 40,000.00 B Cost of Goods Sold 750 units \$      7,40,000.00 A-B Ending Inventory 50 units \$         40,000.00
 Weighted Average A Total Units Available for sale 800 \$      7,80,000.00 Units Sold 750 Ending Inventory Units 50 Valuation Cost of Goods Sold 750 \$             975.000 \$      7,31,250.00 B Cost of Goods Sold 750 units \$      7,31,250.00 A-B Ending Inventory 50 units \$         48,750.00
 Weighted Average Cost Per unit Units (A) 800 Total Cost (B) \$   7,80,000 Average Cost (C=B/A) \$         975.0

Thanks

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