Question

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                    75           $ 1,500                 $ 112,500  

May 1                    75         $ 1,600                   120,000  

Total on hand 150                                       $ 232,500  

Prepare journal entries to record the cost of the 140 Millennium laptops sold on May 10, assuming that Hudson Computing uses the following. (Round your final answers to the nearest dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

a. Specific identification method (71 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.

Answer 1

Journal entries to record the cost of the 140 Millennium laptops sold on May 10
Specific identification method
Date	Account Titles	Debit	Credit
May.10	Cost of goods sold	$216,900.00
	Inventory		$216,900.00
Average Cost method
Date	Account Titles	Debit	Credit
May.10	Cost of goods sold	$217,000.00
	Inventory		$217,000.00
Average cost per unit = $232500/150 units = $1550 per unit
FIFO Method
Date	Account Titles	Debit	Credit
May.10	Cost of goods sold	$216,500.00
	Inventory		$216,900.00
LIFO Method
Date	Account Titles	Debit	Credit
May.10	Cost of goods sold	$217,500.00
	Inventory		$217,500.00