Exercise 5-3 Perpetual: Inventory costing methods LO P1

Required information

Use the following information for the Exercises below.

[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	190	units	@	$	7.00	=	$	1,330
Jan.	10		Sales										150	units	@	$	16.00
Jan.	20		Purchase	110	units	@	$	6.00	=		660
Jan.	25		Sales										130	units	@	$	16.00
Jan.	30		Purchase	280	units	@	$	5.50	=		1,540
			Totals	580	units					$	3,530		280	units

The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 300 units, where 280 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 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.

Determine the cost assigned to ending inventory and to cost of goods sold using weighted average. (Round cost per unit to 2 decimal places.)

Weighted Average - Perpetual:

Goods Purchased

Cost of Goods Sold

Inventory Balance

Date

# of units

Cost per unit

# of units sold

Cost per unit

Cost of Goods Sold

# of units

Cost per unit

Inventory Balance

January 1

190

@

$7.00

=

$1,330.00

January 10

January 20

Average cost

January 25

January 30

Totals

Determine the cost assigned to ending inventory and to cost of goods sold using FIFO.

Perpetual FIFO:

Goods Purchased

Cost of Goods Sold

Inventory Balance

Date

# of units

Cost per unit

# of units sold

Cost per unit

Cost of Goods Sold

# of units

Cost per unit

Inventory Balance

January 1

190

@

$7.00

=

$1,330.00

January 10

January 20

January 25

January 30

Totals

Required 2

Determine the cost assigned to ending inventory and to cost of goods sold using LIFO.

Perpetual LIFO:

Goods Purchased

Cost of Goods Sold

Inventory Balance

Date

# of units

Cost per unit

# of units sold

Cost per unit

Cost of Goods Sold

# of units

Cost per unit

Inventory Balance

January 1

190

@

$7.00

=

$1,330.00

January 10

January 20

January 25

January 30

Totals

Required 3