On May 10, Hudson Computing sold 140 Millennium laptop computers to Apex Publishers. At the date of this sale, Hudson’s perpetual inventory records included the following cost layers for the Millennium laptops.
Purchase Date | Quantity | Unit Cost | Total Cost | ||||||
Apr. 9 | 120 | $ | 1,500 | $ | 180,000 | ||||
May 1 | 30 | $ | 1,600 | 48,000 | |||||
Total on hand | 150 | $ | 228,000 | ||||||
Prepare journal entries to record the cost of the 140 Millennium laptops sold on May 10, assuming that Hudson Computing uses the following.
a. Specific identification method (102 of the units sold were purchased on April 9, and the remaining units were purchased on May 1).
b. Average-cost method.
c. FIFO method.
d. LIFO method.
a) Specific identification method
Cost of goods sold = (102 x 1500) + (38 x 1600) = 213,800
Journal Entry -
Cost of goods sold Dr $213,800
Inventory $213,800
b) Average cost method
Cost of goods sold = 140 x (228000/150) = 212,800
Journal Entry -
Cost of goods sold Dr $212,800
Inventory $212,800
c) FIFO Method
Cost of goods sold = (120 x 1500) + (20 x 1600) = 212,000
Journal Entry -
Cost of goods sold Dr $212,000
Inventory $212,000
d) LIFO method
Cost of goods sold = (110 x 1500) + (30 x 1600) = 213,000
Journal Entry -
Cost of goods sold Dr $213,000
Inventory $213,000
Get Answers For Free
Most questions answered within 1 hours.