Reference no: EM132737004

Question - 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 850 units @ $95 each

Purchases: January 151,800 units @ $110 each

January 211,600 units @ $115 each

Sales: January 5800 units @ $135 each

January 221,200 units @ $145 each

January 29650 units @ $150 each

Ending inventory, January 31, 2021 1,600 units

Required -

1. Assume that inventory costs were declining during January. The inventory purchased on January 15 had a unit cost of $85, and the inventory purchased on January 21 had a unit cost of $80. All other information is the same. Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January 2021?

2. Which method will result in the highest ending inventory balance?

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