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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.         Beginning inventory, January 1, 2021 600 units @ $80 each Purchases: January 15 1,000 units @ $95 each January 21 800 units @ $100 each Sales: January 5 400 units @ $120 each January 22 800 units @ $130 each January 29 400 units @ $135 each Ending inventory, January 31, 2021 800 units 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 the cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods.

Alta Ski Company’s inventory records contained the following information regarding its latest ski model. The company uses a periodic inventory system.         Beginning inventory, January 1, 2021 600 units @ $80 each Purchases: January 15 1,000 units @ $95 each January 21 800 units @ $100 each Sales: January 5 400 units @ $120 each January 22 800 units @ $130 each January 29 400 units @ $135 each Ending inventory, January 31, 2021 800 units 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 the cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
 

     
Beginning inventory, January 1, 2021 600 units @ $80 each
Purchases:
January 15 1,000 units @ $95 each
January 21 800 units @ $100 each
Sales:
January 5 400 units @ $120 each
January 22 800 units @ $130 each
January 29 400 units @ $135 each
Ending inventory, January 31, 2021 800 units

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 the 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 Ending Inventory - Periodic FIFO Cost of Goods Available for Sale # of units in ending inventory FIFO Cost per unit Cost per unit Cost per unit # of units Cost of Goods Sold Ending Inventory # of units sold Beginning Inventory 600 $ 80 $ 48,000 $ 80 $ 80 $ Purchases: January 15 1,000 $ 95 95,000 95 95 January 21 800 100 80,000 $ 100 $ 100 Total 2,400 $ 223,000 $ $ Cost of Goods Available for Sale Cost of Goods Sold - Periodic LIFO Ending Inventory - Periodic LIFO Cost of Goods Available for Sale # of units in ending inventory LIFO Cost per Cost per unit Cost per unit Ending Inventory # of units Cost of Goods Sold # of units unit sold Beginning Inventory 600 $ 80 $ 48,000 $ 80 $ $ 80 Purchases: January 15 1,000 $ 95 95,000 $ 95 $ 95 January 21 800 $ 100 80,000 $ 100 $ 100 Total 2,400 $ 223,000 $ $ %24
Transcribed Image Text:Cost of Goods Available for Sale Cost of Goods Sold - Periodic FIFO Ending Inventory - Periodic FIFO Cost of Goods Available for Sale # of units in ending inventory FIFO Cost per unit Cost per unit Cost per unit # of units Cost of Goods Sold Ending Inventory # of units sold Beginning Inventory 600 $ 80 $ 48,000 $ 80 $ 80 $ Purchases: January 15 1,000 $ 95 95,000 95 95 January 21 800 100 80,000 $ 100 $ 100 Total 2,400 $ 223,000 $ $ Cost of Goods Available for Sale Cost of Goods Sold - Periodic LIFO Ending Inventory - Periodic LIFO Cost of Goods Available for Sale # of units in ending inventory LIFO Cost per Cost per unit Cost per unit Ending Inventory # of units Cost of Goods Sold # of units unit sold Beginning Inventory 600 $ 80 $ 48,000 $ 80 $ $ 80 Purchases: January 15 1,000 $ 95 95,000 $ 95 $ 95 January 21 800 $ 100 80,000 $ 100 $ 100 Total 2,400 $ 223,000 $ $ %24
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