Alta Ski Company's inventory records contained the following information regarding its latest ski model. The company uses a periodic inventory system. 650 units @ $75 each 1,400 units @ $90 each 1,200 units @ $95 each Beginning inventory, January 1, 2021 Purchases: January 15 January 21 Sales: January 5 January 22 January 29 Ending inventory, January 31, 2021 600 units @ $115 each 1,000 units @ $125 each 450 units @ $130 each 1,200 units Required: 1a. Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January 2021? 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. 3a. Assume that inventory costs were declining during January. The inventory purchased on January 15 had a unit cost of $65, and the inventory purchased on January 21 had a unit cost of $60. All other information is the same. Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January 2021? 3b. Which method will result in the highest ending inventory balance? 3c. Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods. Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods. FIFO Cost of Goods Available for Sale Cost of Goods # of units unit Sale 650 $ 75 $ 48,750 Cost per Available for Cost of Goods Sold - Periodic FIFO # of units Cost per Cost of unit Goods Sold Ending Inventory - Periodic FIFO # of units Cost per Ending in ending unit Inventory inventory 75 $ sold $ 75 $ 0 Beginning Inventory Purchases: January 15 January 21 Total 90 GA 1,400 $ 1,200 $ 3,250 126,000 114,000 288,750 90 95 $ $ 90 95 95 $ 0 A $ 0 $ 0 0 0 Cost of Goods Sold - Periodic LIFO LIFO Cost of Goods Available for Sale Cost of Goods # of units Cost per Available for unit Sale 650 75 $ 48,750 # of units sold Cost per unit Cost of Goods Sold Ending Inventory - Periodic LIFO # of units in ending Cost per Ending unit Inventory inventory 75 $ $ 75 $ 0 EA Beginning Inventory Purchases: January 15 January 21 Total 90 1,400 $ 1,200 $ 3,250 126,000 114,000 288,750 $ $ 90 95 90 95 95 0 $ 0 $ 0 0 $ 0 Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods. Cost of Goods Sold - Periodic FIFO Inventory Balance - Periodic FIFO FIFO: Cost of Goods Available for Sale - FIFO Cost of # of Cost per Goods units unit Available for Sale 650 $ 75.00 $ 48,750 # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory $ 75.00 $ 75.00 $ 0 Beg. Inventory Purchases: January 15 January 21 Total 65.00 0 65.00 60.00 60.00 0 0 $ $ 0 1,400 65.00 91,000 1,200 60.00 72,000 3,250 $ 211,750 Cost of Goods Available for Sale -LIFO Cost of # of Cost per Goods units unit Available for Sale 650 $ 75.00 $ 48,750 Cost of Goods Sold - Periodic LIFO Inventory Balance - Periodic LIFO LIFO: # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory $ 75.00 75.00 $ 0 Beg. Inventory Purchases: January 15 January 21 Total 0 1,400 1,200 3,250 65.00 60.00 91,000 72,000 $ 211,750 65.00 60.00 65.00 60.00 0 0 $ 0 $ 0
