ezto.mheducation.com Chapter 5 HW Laker Company Reported The Follow E connect Ac

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ezto.mheducation.com Chapter 5 HW Laker Company Reported The Follow E connect Acct 2001 Intro to Financial A ACCOUNTING Chapter 5 HW Questions 1-4 (of 10) Exercise 5-3 Perpetual: Inventory costing methods LO P3 The following information applies to the questions displayed below Laker Company reported the following January purchases and sales data for lits only product sold at Retail Date Activites Jan. 1 Beginning Inventory 140 units @ $6.00-$ 840 Units Acquired at Cost Units sold at Retal Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase 60 units@$5.00 300 180 units o $4.50810 380 units 100 units $15 80 units $15 Totals $1,950 180 units Laker Company uses a perpetual Inventory system. For specific identification, ending Inventory consists 200 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory References Section Break Exercise 5-3 Perpetual: Inventory costing methods LO P

Explanation / Answer

1 Specific identification method Available for sale Cost of goods sold Ending inventory Purchase date Activity Units Unit cost ($) Unit sold unit cost ($) COGS ($ ) Ending inventory-units Cost per unit ($ ) Ending inventory-cost ($ ) 1-Jan Beginning inventory 140 6 125 6 750 15 6 90 20-Jan Purchases 60 5 55 5 275 5 5 25 30-Jan Purchases 180 4.5 0 4.5 0 180 4.5 810 TOTAL 380 180 1025 200 925 2 Weighted average - perpectual Goods purchased Cost of goods sold Inventory Balance Date # of units Cost per unit # of units Cost per unit COGS ($ ) # of units Cost per unit Inventory balance 1-Jan 140 6 100 6 600 40 6 240 20-Jan 60 5 80 5.4 432 20 5.4 108 30-Jan 180 4.5 0 200 4.59 918 Average cost Date Average cost per unit 10-Jan ( $ 840/140 ) 6 25-Jan {( 40 x $ 6) + $ 300}/100 5.4 30-Jan { ($ 108 + $ 810)/(20 + 180)} 4.59 3 Perpectual LIFO Goods purchased Cost of goods sold Inventory Balance Date # of units Cost per unit # of units Cost per unit COGS ($ ) # of units Cost per unit Inventory balance 1-Jan 140 6 840 10-Jan 100 6 600 40 6 240 20-Jan 60 5 60 5 300 25-Jan 60 5 300 0 5 0 20 6 120 20 6 120 30-Jan 180 4.5 180 4.5 810 31-Jan 20 6 120 180 4.5 810 TOTAL 200 930 4 Perpectual FIFO Goods purchased Cost of goods sold Inventory Balance Date # of units Cost per unit # of units Cost per unit COGS ($ ) # of units Cost per unit Inventory balance 1-Jan 140 6 840 10-Jan 100 6 600 40 6 240 20-Jan 60 5 60 5 300 25-Jan 40 6 240 0 6 0 40 5 200 20 5 100 30-Jan 180 4.5 180 4.5 810 31-Jan 20 5 100 180 4.5 810 TOTAL 200 910

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