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18 June, 23:22

Lopez Company reported the following current-year data for its only product. The company uses a periodic inventory system, and its ending inventory consists of 150 units-50 from each of the last three purchases. Determine the cost assigned to ending inventory and to cost of goods sold for the following. (Do not round intermediate calculations and round your answers to 2 decimal places.) Which method yields the highest net income? LIFO Weighted average FIFO Specific identification.

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  1. 19 June, 02:57
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    Answer / Explanation

    The question is incomplete because we have not been provided with the inventory data. This con be found in search engines. However, kindly find the complete question below.

    Lopez Co. reported the following current-year data for its only product. The company uses a periodic inventory system, and its ending inventory consists of 150 units-50 from each of the last three purchases.

    Jan. 1 Beginning inventory 235 units @ $3.40 = $ 799

    Mar. 7 Purchase 510 units @ $4.00 = 2,040

    July 28 Purchase 1,150 units @ $4.60 = 5,290

    Oct. 3 Purchase 1,030 units @ $4.90 = 5,047

    Dec. 19 Purchase 460 units @ $5.00 = 2,300

    I f we sum the total available for sale:

    We have,

    Total = 3,385 units $ 15,476

    Now, if we move forward to determine the cost assigned to ending inventory and cost of goods sold considering that we have to round our per unit costs to 2 decimal places and final answers to the nearest dollar amount.)

    W then have:

    Ending inventory Cost of goods sold

    (a) Specific identification

    Ending Inventory =

    (135 x 4.60) + (135 x 4.90) + (135 x 5.00) = $1,958

    COGS =

    15,476 - 1,958 = $13,518

    (b) Weighted average

    15,476 / 3,385 = $4.572 cost per unit

    Ending Inventory

    405 x 4.572 = $1,852

    COGS

    15,476 - 1,852 = $13,624

    c) FIFO

    Ending Inventory

    405 x $5.00 = $2,025

    COGS

    15,476 - 2,025 = $13,451

    (d) LIFO

    Ending Inventory

    (235 x 3.40) + (170 x 4.00) = $1,479

    COGS

    15,476 - 1,479 = $13,997

    Which method yields the highest net income?

    The one with the highest ending inventory.

    FIFO
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