Question

# Required information [The following information applies to the questions displayed below.]    Laker Company reported the...

Required information

[The following information applies to the questions displayed below.]

Laker Company reported the following January purchases and sales data for its only product.

 Date Activities Units Acquired at Cost Units sold at Retail Jan. 1 Beginning inventory 175 units @ \$ 10.00 = \$ 1,750 Jan. 10 Sales 135 units @ \$ 19.00 Jan. 20 Purchase 130 units @ \$ 9.00 = 1,170 Jan. 25 Sales 140 units @ \$ 19.00 Jan. 30 Purchase 275 units @ \$ 8.00 = 2,200 Totals 580 units \$ 5,120 275 units

Required:
The Company uses a periodic inventory system. For specific identification, ending inventory consists of 305 units, where 275 are from the January 30 purchase, 5 are from the January 20 purchase, and 25 are from beginning inventory. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average, (c) FIFO, and (d) LIFO.

 (a) Specific identification Ending inventory = (275*8) + (5*9) + (25*10) 2495 Cost of goods sold = Cost of goods available for sale - Ending inventory = 5120 -2495 2625 (b) Weighted average method : Average cost per unit = Cost of goods available for sale / Units available for sale = 5120 / 580 8.83 Ending inventory = 305*8.83 2693 Cost of goods sold = Cost of goods available for sale - Ending inventory = 5120 - 2693 2427 .(c) FIFO Ending inventory = (275*8) + (30*9) 2470 Cost of goods sold = Cost of goods available for sale - Ending inventory = 5120 - 2470 2650 (d) LIFO Ending inventory = (175*10) + (130*9) 2920 Cost of goods sold = Cost of goods available for sale - Ending inventory = 5120 - 2920 2200

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