Exercise 8-16 (Algo) Comparison of FIFO and LIFO; periodic system (LO8- 1, 8-4] Alta Ski Company's inventory records contained the following information regarding its latest sk model. The company uses a periodic inventory system. 1,050 units @ $70 each 2,200 units @ $85 each 2,000 units @ $90 each Beginning inventory, January 1, 2021 Purchases: January 15 January 21 Sales: January 5 January 22 January 29 Ending inventory, January 31, 2021 1,000 units @ $110 each 1,400 units @ $120 each 850 units @ $125 each 2,000 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 $60, and the inventory purchased on January 21 had a unit cost of $55. 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. Req 1A and 1B Reg 2 Req 3A and 3] Req 30 Assume that inventory costs were declining during January. Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January 2021 and highest ending inventory balance? 3a. Highest cost of goods sold figure 3b. Highest ending inventory balance 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. FIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic FIFO Cost of Goods # of units Cost per Available for # of units Cost per Cost of unit sold unit Sale Goods Sold 1,050 $ 70 $ 73,500 $ 70 Ending Inventory - Periodic FIFO # of units in ending Cost per Ending unit inventory Inventory $ 70 $ 0 Beginning Inventory Purchases: January 15 January 21 Total 85 $ 85 85 0 2,200 $ 2,000 $ 5,250 187,000 180,000 440,500 $ $ 90 90 0 90 $ 0 $ 0 0 $ 0 LIFO Cost per Cost of Goods Available for Sale Cost of Goods Sold - Periodic LIFO Cost of Goods # of units Available for # of units Cost per Cost of unit sold unit Sale Goods Sold 1,050 $ 70 $ 73,500 $ 70 $ 0 Ending Inventory - Periodic LIFO # of units in ending Cost per Ending unit inventory Inventory $ 70 $ Beginning Inventory Purchases: January 15 January 21 Total 85 $ 85 $ 85 2,200 $ 2,000 $ 5,250 90 187,000 180,000 440,500 90 90 0 0 O 0 0 Req 1A and 1B Req 2 Req 3A and 3B Req 3C sold O Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods. Cost of Goods Available for Sale Cost of Goods Sold - Periodic - FIFO FIFO Inventory Balance - Periodic FIFO FIFO: Cost of # of Cost per Goods # of Cost per Cost of # of units Cost per Ending units units unit Available for unit Goods Sold in ending unit Inventory Sale inventory Beg. Inventory 1,050 $ 70.00 $ 73,500 $ 70.00 $ 70.00 $ 0 Purchases: January 15 2,200 60.00 132,000 60.00 60.00 0 January 21 2,000 55.00 110,000 55.00 55.00 Total 5,250 $ 315,500 0 $ $ Cost of Goods Available for Sale Cost of Goods Sold - Periodic -LIFO LIFO Inventory Balance - Periodic LIFO LIFO: Cost of # of # of Cost per # of units Goods Cost per Cost of units Cost per in ending Ending units unit Available for unit Goods Sold unit sold Sale Inventory inventory Beg. Inventory 1,050 $ 70.00 $ 73,500 $ 70.00 $ 70.00 $ 0 Purchases: January 15 2,200 60.00 132,000 60.00 60.00 0 January 21 2,000 55.00 110,000 55.00 0 55.00 Total 5,250 $ 315,500 0 $ 0 0 $ 0