Enrail Ski Company’s inventory records contained the following information regarding its latest ski model. The company uses a periodic inventory system. (I have the answers for #1 and #2, but I need the calculations for #3.Please show ALL work.) Required: 1. Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January Year 1? Why? Which method will result in the highest ending inventory balance? Why? 2. Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods. 3. Now assume that inventory costs were declining during January. The inventory purchased on January 15 had a unit cost of $74, and the inventory purchased on January 21 had a unit cost of $68. All other information is the same. Repeat requirements 1 and 2 Beginning inventory, January 1, year 1 840 units @ $85 each Purchases: January 15 1,000 units @ $94 each January 21 2,350 units @ $106 each Sales: January 5 575 units @ $110 each January 22 1,250 units @ $140 each January 29 900 units @ $160 each Ending inventory, January 31, year 1 1,465 units
Enrail Ski Company’s inventory records contained the following information regarding its latest ski model. The company uses a periodic inventory system. (I have the answers for #1 and #2, but I need the calculations for #3.Please show ALL work.) Required: 1. Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January Year 1? Why? Which method will result in the highest ending inventory balance? Why? 2. Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods. 3. Now assume that inventory costs were declining during January. The inventory purchased on January 15 had a unit cost of $74, and the inventory purchased on January 21 had a unit cost of $68. All other information is the same. Repeat requirements 1 and 2 Beginning inventory, January 1, year 1 840 units @ $85 each Purchases: January 15 1,000 units @ $94 each January 21 2,350 units @ $106 each Sales: January 5 575 units @ $110 each January 22 1,250 units @ $140 each January 29 900 units @ $160 each Ending inventory, January 31, year 1 1,465 units
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