Alta Ski Company's inventory records contained the following information regarding its latest ski model. The company uses a periodic inventory system. 900 units @ $100 each 1,900 units @ $115 each 1,700 units @ $120 each Beginning inventory, January 1, 2021 Purchases: January 15 January 21 Sales: January 5 January 22 January 29 Ending inventory, January 31, 2021 850 units @ $140 each 1,250 units @ $150 each 700 units @ $155 each 1,700 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 $90, and the inventory purchased on January 21 had a unit cost of $85. 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. Req 1A and 1B Reg 2 Req 3A and 3B Req 3C Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods. Cost of Goods Sold - Periodic FIFO FIFO Cost of Goods Available for Sale Cost of Goods Cost per # of units Available for unit Sale 900 $ 100 $ 90,000 of units sold Cost per unit Cost of Goods Sold Ending Inventory - Periodic FIFO # of units Cost per Ending in ending unit Inventory inventory $ 100 $ 0 $ 100 Beginning Inventory Purchases: January 15 January 21 Total $ 115 218,500 $ 115 $ 115 0 1,900 1,700 4,500 $ 120 $ 120 0 $ 120 204,000 512,500 $ 0 $ 0 0 $ 0 LIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic LIFO Cost of Goods Cost per # of units Cost per # of units Cost of Available for unit sold unit Goods Sold Ending Inventory - Periodic LIFO # of units Cost per Ending in ending unit Inventory inventory $ 100 Sale 900 $ 100 $ 90,000 $ 100 $ 0 Beginning Inventory Purchases: January 15 January 21 Total 1,900 $ 115 218,500 $ 115 $ 115 1,700 $ 120 $ 120 $ 120 0 204,000 512,500 4,500 $ 0 $ 0 0 $ 0 Req 1A and 1B Req 2 Reg 3A and 3B Req 3C 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: # of units Cost per Cost per Cost of Goods Available for Sale - FIFO Cost of # of Cost per Goods units unit Available for Sale $ 900 100.00 $ 90,000 # of units sold unit Cost of Goods Sold in ending inventory unit Ending Inventory Beg. Inventory $ 100.00 $ 100.00 $ 0 0 Purchases: 90.00 90.00 0 January 15 January 21 Total 85.00 0 85.00 0 $ $ 0 0 $ 0 1,900 90.00 171,000 1,700 85.00 144,500 4,500 $ 405,500 Cost of Goods Available for Sale - LIFO Cost of # of # Goods units unit Available for Sale $ 900 $ 100.00 90,000 Cost of Goods Sold - Periodic LIFO Inventory Balance - Periodic LIFO LIFO: Cost per Cost per # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory Ending Inventory unit Beg. Inventory $ 100.00 $ 100.00 $ 0 Purchases: 90.00 90.00 90.00 0 January 15 January 21 Total 1,900 1,700 4,500 171,000 144.500 85.00 85.00 0 85.00 $ 405,500 0 $ 0 0 $ $ 0
