ACC 225
Axia College of University of Phoenix (UoP)
Financial Accounting
Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)
ACC 225 Solution
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Exercise 6-1 (E6-1) Lakia Corporation reported the following current-year purchases and sales data for its only product:
Date Activities 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.
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