## Computation of Cost of Goods Sold and Ending Inventory Using FIFO and LIFOThis table provides a detailed breakdown of the computation of the cost of goods sold (COGS) for January and the ending inventory using both the FIFO (First-In, First-Out) and LIFO (Last-In, First-Out) inventory valuation methods.### FIFO Method#### Cost of Goods Available for Sale- **Beginning Inventory** - Number of units: 1,050 - Cost per unit: $70.00 - Total Cost of Goods Available: $73,500- **Purchases** - January 15: - Number of units: 2,200 - Cost per unit: $60.00 - Total Cost: $132,000 - January 21: - Number of units: 2,000 - Cost per unit: $55.00 - Total Cost: $110,000- **Total** - Number of units: 5,250 - Total Cost: $315,500#### Cost of Goods Sold - Periodic FIFO- This section calculates the COGS based on the FIFO method, accounting for the chronological order of inventory intake. The costs and units sold are listed but not filled.#### Inventory Balance - Periodic FIFO- This column calculates the ending inventory based on units not sold: - Number of units at $70.00, $60.00, and $55.00 - Calculations for the ending inventory value are provided for input.### LIFO Method#### Cost of Goods Available for Sale- **Beginning Inventory** - Number of units: 1,050 - Cost per unit: $70.00 - Total Cost of Goods Available: $73,500- **Purchases** - January 15: - Number of units: 2,200 - Cost per unit: $60.00 - Total Cost: $132,000 - January 21: - Number of units: 2,000 - Cost per unit: $55.00 - Total Cost: $110,000- **Total** - Number of units: 5,250 - Total Cost: $315,500#### Cost of Goods Sold - Periodic LIFO- This section calculates # Inventory Analysis for Alta Ski Company## Inventory Records:- **Beginning inventory, January 1, 2021**: 1,050 units @ $70 each### Purchases:- **January 15**: 2,200 units @ $85 each- **January 21**: 2,000 units @ $90 each### Sales:- **January 5**: 1,000 units @ $110 each- **January 22**: 1,400 units @ $120 each- **January 29**: 850 units @ $125 each- **Ending inventory, January 31, 2021**: 2,000 units## Required:### 1a. Highest Cost of Goods Sold for January 2021- Determine if FIFO or LIFO results in the highest cost of goods sold.### 1b. Highest Ending Inventory Balance- Determine which method results in the highest ending inventory balance.### 2. Compute Cost of Goods Sold using FIFO and LIFO### 3a. Inventory Costs Declining- Assume costs for January 15 and 21 were $60 and $55 respectively. Determine whether FIFO or LIFO results in the highest cost of goods sold.### 3b. Highest Ending Inventory Balance with Declining Costs- Determine which method results in the highest ending inventory balance with the adjusted costs.### 3c. Compute Cost of Goods Sold for Declining Costs using FIFO and LIFO## Graphs and Analysis:### Cost of Goods Sold and Ending Inventory Calculation:- Results needed for both FIFO (First-In, First-Out) and LIFO (Last-In, First-Out) methods.- Explore the implications of cost fluctuations and how they affect financial statements. ### Input Boxes:- For requirements 1a, 1b, 3a, and 3b, users can input values based on calculations.- Requirements provide practice exercises to understand theoretical inventory management impacts on cost.## Conclusion:This exercise allows students to apply inventory accounting methods to determine financial outcomes under varying cost conditions. Understanding FIFO and LIFO impacts on cost of goods sold and ending inventory balance helps prepare for real-world accounting scenarios.

Name: ## Computation of Cost of Goods Sold and Ending Inventory Using FIFO
Uploaded: 2024-03-20T06:32:37.000Z
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Description: ## Computation of Cost of Goods Sold and Ending Inventory Using FIFO and LIFOThis table provides a detailed breakdown of the computation of the cost of goods sold (COGS) for January and the ending inventory using both the FIFO (First-In, First-Out)