Problem 8.1A (Static) Four Methods of Inventory Valuation (LO8-1)

On January 15, 2021, Sports World sold 1,000 Ace-5 fishing reels to Anglers Warehouse. Immediately prior to this sale, Sports World perpetual inventory records for Ace-5 reels included the following cost layers.

Purchase Date	Quantity		Unit Cost				Total Cost
Dec. 12, 2020	600		$	29			$	17,400
Jan. 9, 2021	900			32				28,800
Total on hand	1,500						$	46,200

Required:

a. Prepare a separate journal entry to record the cost of goods sold relating to the January 15 sale of 1,000 Ace-5 reels, assuming that Sports World uses:

1. Specific identification (500 of the units sold were purchased on December 12, and the remaining 500 were purchased on January 9).

2. Average cost.

3. FIFO.

4. LIFO.

b. Complete a subsidiary ledger record for Ace-5 reels using each of the four inventory valuation methods listed above. Your inventory records should show both purchases of this product, the sale on January 15, and the balance on hand at December 12, January 9, and January 15.

1. Specific identification method.

2. Average-cost method.

3. First-in, First-out (FIFO) method.

4. Last-in, First-out (LIFO) method.