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Alta Ski Company's inventory records contained the following information regarding its latest ski model. The company uses a periodic inventory system. 850 units @ $95 each 1,800 units @ $110 each 1,600 units @ $115 each Beginning inventory, January 1, 2021 Purchases: January 15 January 21 Sales: January 5 January 22 January 29 Ending inventory, January 31, 2021 800 units @ $135 each 1,200 units @ $145 each 650 units @ $150 each 1,600 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 $85, and the inventory purchased on January 21 had a unit cost of $80. 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 30 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 Cost per Cost per Cost per # of units Cost of Goods Available for Sale # of units sold Ending Inventory - Periodic FIFO # of units Ending in ending unit Inventory inventory $ 95 Cost of Goods Sold unit unit Beginning Inventory 850 95 80,750 $ 95 Purchases: $ 110 $ 110 0 January 15 January 21 Total 1,800 $ 110 1,600 $ 115 4,250 198,000 184,000 $ 115 0 $ 115 $ 462,750 0 0 0 0 Cost of Goods Available for Sale Cost of Goods Sold - Periodic LIFO LIFO Cost per Cost per Cost per # of units Cost of Goods Available for Sale # of units sold Cost of Goods Sold Ending Inventory - Periodic LIFO # of units Ending in ending unit inventory Inventory $ 95 unit unit 850 $ 95 80,750 95 0 Beginning Inventory Purchases: January 15 January 21 110 $ 110 110 1,800 $ 1,600 $ 4,250 198,000 184,000 115 115 $ 115 0 Total 462,750 0 $ 0 0 0 Req 1A and 1B Reg 2 Reg 3A and 3B Reg 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: Cost of Goods Available for Sale - FIFO Cost of # of Cost per Goods units unit Available for Sale # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory 850 $ 95.00 $ 80,750 $ 95.00 $ 95.00 $ 0 Beg. Inventory Purchases: January 15 January 21 Total 1,800 85.00 85.00 0 153,000 128,000 85.00 80.00 1,600 80.00 80.00 0 4,250 $ 361,750 0 $ 0 0 $ 0 Cost of Goods Sold - Periodic LIFO Inventory Balance - Periodic LIFO LIFO: Cost of Goods Available for Sale -LIFO Cost of # of Cost per Goods units unit Available for Sale 850 $ 95.00 $ 80,750 Cost per # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory unit Ending Inventory $ 95.00 $ 95.00 $ 0 Beg. Inventory Purchases: 85.00 153,000 85.00 85.00 0 January 15 January 21 Total 1,800 1,600 4,250 80.00 128,000 80.00 0 80.00 $361,750 0 $ 0 0 $ 0
