8. 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, 20211,350units @ $100 eachPurchases:January 152,800units @ $115 eachJanuary 212,600units @ $120 eachSales:January 51,300units @ $140 eachJanuary 221,700units @ $150 eachJanuary 291,150units @ $155 eachEnding inventory, January 31, 20212,600units Required: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 cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods.3a. Assume that inventory costs were declining during January. The inventory purchased on January 15 had a unit cost of $90, and the inventory purchased on January 21 had a unit cost of $85. All other information is the same. Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January 2021?3b. Which method will result in the highest ending inventory balance?3c. Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods. Assume that inventory costs were declining during January. Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January 2021 and highest ending inventory balance? 3a.Highest cost of goods sold figure 3b.Highest ending inventory balance 3c. Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods. Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods.Req 1A and 1BReq 2Req 3A and 3BReq 30Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January 2021 and highest ending inventorybalance?1a. Highest cost of goods sold figure1b. Highest ending inventory balanceReg 1A and 1BReq 2 > Req 1A and 18Req 2Req 3A and 3BReg 30Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods.Cost of Goods Available for SaleCost of Goods Sold - Periodic FIFOEnding Inventory - Periodic FIFOCost of Goods # of units Cost per# of unitsin endinginventoryFIFOCost perCost ofGoods SoldCost perunitEndingInventory# of unitsAvailable forSaleunitsoldunitBeginning Inventory1,350 $ 100 $135,000$100$100 $Purchases:January 15January 21Total2,800 $115322,000$115$1152,600 $ 120312,000120$1206,750769,000$Cost of Goods Available for SaleCost of Goods Sold - Periodic LIFOEnding Inventory - Periodic LIFOCost of GoodsAvailable forSale# of unitsin endinginventoryLIFOCost perunit# of unitssoldCost ofCost perunitCost perunitEndingInventory# of unitsGoods SoldBeginning InventoryPurchases:1,350 $ 100 $135,000$100 $$1002,800 $ 1152,600 $ 120January 15322,000$115$115January 21312,000$120$120Total6,750$769,000$$%24

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Description: 8. 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, 20211,350units @ $100 eachPurchases:January 152,800units @ $1

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Answered: 8. Alta Ski Company's inventory records…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 11E: Alternative Inventory Methods Nevens Company uses a periodic inventory system. During November, the...

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8. 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	1,350	units @ $100 each
Purchases:
January 15	2,800	units @ $115 each
January 21	2,600	units @ $120 each
Sales:
January 5	1,300	units @ $140 each
January 22	1,700	units @ $150 each
January 29	1,150	units @ $155 each
Ending inventory, January 31, 2021	2,600	units

Required:

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 cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods.
3a. Assume that inventory costs were declining during January. The inventory purchased on January 15 had a unit cost of $90, and the inventory purchased on January 21 had a unit cost of $85. All other information is the same. Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January 2021?
3b. Which method will result in the highest ending inventory balance?
3c. Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods.

Assume that inventory costs were declining during January. Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January 2021 and highest ending inventory balance?


3a.	Highest cost of goods sold figure
3b.	Highest ending inventory balance

3c. Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods.

Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods.
Req 1A and 1B
Req 2
Req 3A and 3B
Req 30
Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January 2021 and highest ending inventory
balance?
1a. Highest cost of goods sold figure
1b. Highest ending inventory balance
Reg 1A and 1B
Req 2 >

Req 1A and 18
Req 2
Req 3A and 3B
Reg 30
Compute 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 # of units Cost per
# of units
in ending
inventory
FIFO
Cost per
Cost of
Goods Sold
Cost per
unit
Ending
Inventory
# of units
Available for
Sale
unit
sold
unit
Beginning Inventory
1,350 $ 100 $
135,000
$
100
$
100 $
Purchases:
January 15
January 21
Total
2,800 $
115
322,000
$
115
$
115
2,600 $ 120
312,000
120
$
120
6,750
769,000
$
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
unit
# of units
sold
Cost of
Cost per
unit
Cost per
unit
Ending
Inventory
# of units
Goods Sold
Beginning Inventory
Purchases:
1,350 $ 100 $
135,000
$
100 $
$
100
2,800 $ 115
2,600 $ 120
January 15
322,000
$
115
$
115
January 21
312,000
$
120
$
120
Total
6,750
$
769,000
$
$
%24

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