[The following information applies to the questions displayed below.] Required:
ID: 2538975 • Letter: #
Question
[The following information applies to the questions displayed below.]
Required:
The company uses a perpetual inventory system. For specific identification, ending inventory consists of 270 units, where 120 are from the January 30 purchase, 80 are from the January 20 purchase, and 70 are from beginning inventory.
Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification.
Determine the cost assigned to ending inventory and to cost of goods sold using weighted average.
Laker Company reported the following January purchases and sales data for its only product.Explanation / Answer
Answer
Date
Activities
Cost of Goods Available for sale
Cost of Goods Sold
Ending Inventory
Units
rate
Amount
Units
rate
Amount
Units
rate
Amount
Jan.
1
Beginning inventory
180
7.6
1368
180
7.6
1368
Jan.
10
Sales
105
7.6
798
75
7.6
570
Jan.
20
Purchase
250
6.6
1650
75
7.6
570
250
6.6
1650
Jan.
25
Sales
75
7.6
570
150
6.6
990
100
6.6
660
Jan.
30
Purchase
120
5.6
672
150
6.6
990
120
5.6
672
Totals
550
3690
280
2028
270
1662
Cost of Goods Sold = $2028
Ending Inventory= $1662
Specific Identification
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
180
7.6
1368
110
7.6
836
70
7.6
532
Purchases:
Jan-20
250
6.6
1650
170
6.6
1122
80
6.6
528
Jan-30
120
5.6
672
0
5.6
0
120
5.6
672
TOTAL
550
3690
280
$1958
270
$1732
Date
Activities
Cost of Goods Available for sale
Units
rate
Amount
Jan.
1
Beginning inventory
180
7.6
1368
Jan.
10
Sales
Jan.
20
Purchase
250
6.6
1650
Jan.
25
Sales
Jan.
30
Purchase
120
5.6
672
Totals
550
$6.71
3690
Weighted Average - $3690 / 550 units =$6.71 per unit
Cost of Goods Sold = 280 units x $6.71 = $ 1878.8
Ending Inventory = 270 units x $6.71 = $1811.7
Date
Activities
Cost of Goods Available for sale
Cost of Goods Sold
Ending Inventory
Units
rate
Amount
Units
rate
Amount
Units
rate
Amount
Jan.
1
Beginning inventory
180
7.6
1368
180
7.6
1368
Jan.
10
Sales
105
7.6
798
75
7.6
570
Jan.
20
Purchase
250
6.6
1650
75
7.6
570
250
6.6
1650
Jan.
25
Sales
75
7.6
570
150
6.6
990
100
6.6
660
Jan.
30
Purchase
120
5.6
672
150
6.6
990
120
5.6
672
Totals
550
3690
280
2028
270
1662
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