Purchase Solution

Perpetual Inventory COsting Method

Not what you're looking for?

Ask Custom Question

Lakia Corporation reported the following current-year purchases and sales data for its only product:
Date
Date Activities Units Acquired at Cost Units Sold at Retail es Units Acquired at Cost Units Sold at Retail
Jan. 1 Beginning inventory . . . . . . 120 units@ $6.00 = $ 720
Jan. 10 Sales . . . . . . . . . . . . . . . . . . 70 units @ $15
Mar. 7 Purchase . . . . . . . . . . . . . . . 200 units@ $5.50 = 1,100
Mar. 15 Sales . . . . . . . . . . . . . . . . . . 125 units @ $15
July 28 Purchase . . . . . . . . . . . . . . . 500 units@ $5.00 = 2,500
Oct. 3 Purchase . . . . . . . . . . . . . . . 375 units@ $4.40 = 1,650
Oct. 5 Sales . . . . . . . . . . . . . . . . . . 600 units @ $15
Dec. 19 Purchase . . . . . . . . . . . . . . . 100 units@ $4.10 = 410 ______
Totals . . . . . . . . . . . . . . . . . 1,295 units $6,380 795 units

Lakia uses a perpetual inventory system. Ending inventory consists of 500 units, 400 from the July 28 purchase and 100 from the December 19 purchase.

Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average, (c) FIFO, and (d) LIFO.

Purchase this Solution
Solution Summary

It contains solution for problems related to:

- Specific Identification
- Weighted Average
- FIFO, and
- LIFO

Solution Preview

A. Specific Identification: is an actual physical flow inventory costing method in which items still in inventory are specifically costed to arrive at the total cost of the ending inventory. This means that for specific Identification, ending inventory is specifically the 400 from July 28 and the 100 from December 19.

Ending inventory = 400 * 5 (July 28 purchase) + 100 * 4.10 (December 19 Purchase)
Ending Inventory = 2410

````````````````````````````````

B. Weighted Average: In order to determine the weighted-average, you need to add all the costs of the items purchased during the year ...

Purchase this Solution
Free BrainMass Quizzes
Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Introduction to Finance

This quiz test introductory finance topics.

MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

View More Free Quizzes
Related BrainMass Solutions

  • Periodic and perpetual inventory systems and inventory cost

    435460 Periodic and perpetual inventory systems and inventory costing methods See attached file for proper format of the table.

  • Case - Which method shall we use? LIFO FIFO

    Added costing difficulties arise when returns to vendors or to the storeroom occur. Perpetual inventory system updates inventory accounts after each purchase or sale. Inventory subsidiary ledger is updated after each transaction.

  • Perpetual Inventory and Weighted Average Costing

    517543 Perpetual Inventory and Weighted Average Costing This company uses a perpetual inventory system with a weighted average inventory costing method. The following information is available for the month of April.

  • Inventory Costing Methods

    Inventory Costing Methods A company can keep track of its inventory in two ways, perpetual and periodic. In a perpetual inventory system, companies keep detailed records of the cost of each inventory purchase and sale.

  • FIFO Perpetual Inventory

    If Wilsonwear uses the FIFO inventory costing method, how much is ending inventory at March 31st? Ending inventory (in units)= Purchase - Sales = (25+130)-(20+120) = 15 units Ending Inventory in $= 15*$4/unit =$60.

  • LIFO Perpetual Inventory

    If Portey uses the LIFO inventory costing method, cost of goods sold for the month of June is...? Please see the attached Excel 97-2003 file.

  • Perpetual & Periodic Inventory System

    goods sold for June under a. first-in, first-out (FIFO) method b. last-in, first-out (LIFO) method c. average cost method 4.Prepare a table showing the financial statement effects of these Inventory Costing Methods under the periodic system and the

  • Inventory Valuation Methods Compared

    Inventory Costing Methods A company can keep track of its inventory in two ways, perpetual and periodic. In a perpetual inventory system, companies keep detailed records of the cost of each inventory purchase and sale.

  • P 8-1 James Company periodic inventory system

    James uses the net method to record purchases. The merchandise was shipped f.o.b. shipping point and freight charges of $500 were paid in cash. 2. On October 18 the company returned merchandise costing $3,000.

  • Perpetual inventory calculations for Parker Company

    191601 Perpetual Inventory Calculations for Parker Company Parker Company uses a perpetual inventory system.

View More Related Solutions