Alta Ski Company\'s inventory records contained the following information regard

Question

Alta Ski Company's inventory records contained the following information regarding its latest ski model. The company uses a inventory system. periodic Beginning inventory, January 1, 2018 Purchases 1,250 units@ $90 each January 15 January 21 2,600 units$105 each 2,400 units@$110 each Saless January January 22 January 29 1,200 units $130 each 1,600 units$140 each 1,050 units$145 each 2,400 units Ending inventory, January 31, 2018 Required: 1a. Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January 2018 1b. Which method will result in the highest ending inventory balance? 2. Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods

Explanation / Answer

(1)

1(a)

Highest Cost of goods sold figure

LIFO   [416250]

1(b)

Highest Ending Inventory Balance

FIFO   [264000]

(2) Periodic FIFO :-

FIFO

Cost of Goods Available for Sale

Cost of Goods Sold-Periodic FIFO

Ending Inventory-Periodic FIFO

# of units

Cost pu

Cost of Goods Available for Sale

# of units

Cost pu

Cost of Goods Sold-Periodic FIFO

# of units

Cost pu

Ending Inventory-Periodic FIFO

Beginning Inventory

1250

90

112500

1250

90

112500

-

-

Purchases:-

January 15

2600

105

273000

2600

105

273000

-

-

January 21

2400

110

264000

-

2400

110

264000

Total

6250

649500

3850

385500

2400

264000

Periodic LIFO :-

FIFO

Cost of Goods Available for Sale

Cost of Goods Sold-Periodic LIFO

Ending Inventory-Periodic LIFO

# of units

Cost pu

Cost of Goods Available for Sale

# of units

Cost pu

Cost of Goods Sold-Periodic LIFO

# of units

Cost pu

Ending Inventory-Periodic LIFO

Beginning Inventory

1250

90

112500

-

-

1250

90

112500

Purchases:-

January 15

2600

105

273000

1450

105

152250

1150

105

120750

January 21

2400

110

264000

2400

110

264000

-

-

Total

6250

649500

3850

416250

2400

233250

1(a)

Highest Cost of goods sold figure

LIFO   [416250]

1(b)

Highest Ending Inventory Balance

FIFO   [264000]

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