Reference no: EM132687639

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, 2021850units @ $95 each

Purchases:January 151,800units @ $110 each

January 211,600units @ $115 each

Sales:January 5800units @ $135 each

January 221,200units @ $145 each

January 29650units @ $150 each

Ending inventory, January 31, 20211,600units

Required:

Problem 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?

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

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