Help Save Exit Sub Alta Ski Companys inventory records cont

Help Save & Exit Sub Alta Ski Company\'s inventory records contained the following information regarding its latest ski model. The company uses a periodic inventory system. Beginning inveatory, January 2. 2018 1.450 unita 565 each January 15 January 21 3,000 units $80 each 2,800 units $85 each Sales anuary January 22 anuary 29 1,400 units $105 esch 1,800 units $115sch 250 units 8$120 each 2,800 umits Ending inventory, January 31, 2018 Required: 1a. Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January 2018? 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. Complete this question by entering your answers in the tabs below Req 1A and 1B Req 2 Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January 2018 and highest ending inventory balance? ta.Hgrest cost of goods sold for 1b. Highest ending inventory balance

Solution

Requirement 1 LIFO will result in the highest cost of goods sold figure because both the cost of merchandise and the quantity of merchandise rose during the period. FIFO will result in the highest ending inventory balance for the same reasons. Requirement 2 Cost of goods available for sale: Beginning inventory (1,450 x $65) $94,250 Purchases: 3,000 x $ 80        240,000 2,800 x $ 85        238,000       478,000 Cost of goods available (7,250 units) $   572,250 FIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic FIFO Ending Inventory - Periodic FIFO # of units Cost per unit Cost of Goods Available for Sale # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory Beginning Inventory 1450 65 94250 1450 65 94250 65 Purchases: January 15 3000 80 240000 3000 80 240000 80 January 21 2800 85 238000 2800 85 238000 Total 7250 572250 4450 334250 2800 238000 LIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic LIFO Ending Inventory - Periodic LIFO # of units Cost per unit Cost of Goods Available for Sale # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory Beginning Inventory 1450 65 94250 65 1450 65 94250 Purchases: January 15 3000 80 240000 1650 80 132000 1350 80 108000 January 21 2800 85 238000 2800 85 238000 85 Total 7250 572250 4450 370000 2800 202250