Complete Question:
Required information [The following information applies to the questions displayed below.] Laker Company reported the following January purchases and sales data for its only product.
Date Activities Units Acquired at Cost Units sold at Retail
Jan. 1 Beginning inventory 140 units $6.00-$ 840
Jan. 10 Sales 100 units at $15
Jan. 20 Purchase 60 units $5.00 300
Jan. 25 Sales 80 units at $
Totals 380 $1,950 180 units
Required The Company uses a periodic inventory system. Determine the cost assigned to ending inventory and to cost of goods sold using specific identification. For specific identification, ending inventory consists of 200 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory.
Answer:
Cost of goods sold = $1,025
Ending inventory = $925
Step-by-step explanation:
a) Data and Calculations:
Units of goods available for sale for the period = 380
Units of goods sold during the period = 180
Units of goods in ending inventory = 200 (380 - 180)
b) Cost of goods sold = Cost of goods available for sale minus ending inventory
= $1,950 - $925
= $1,025
c) Ending Inventory:
180 are from the January 30 purchase at $4.50 = $810
5 are from the January 20 purchase at $5.00 = $25
15 are from beginning inventory at $6.00 = $90
200 units Total cost of ending inventory = $925
d) The cost of goods available for sale consists of the cost of goods sold and the cost of ending inventory. The cost of goods sold under the periodic inventory system is derived by first calculating the cost of ending inventory, which has specific identification. Then this ending inventory cost is deducted from the cost of goods available for sale for the period.