Question - On May 10, Hudson Computing sold 90 Millennium laptop computers to Apex Publishers. At the date of this sale, Hudson's perpetual inventory records included the following cost layers for the Millennium laptops:
|
Purchase Date
|
Quantity
|
Unit Cost
|
Total Cost
|
|
Apr. 9
|
70
|
$1,500
|
$105,000
|
|
May 1
|
30
|
$1,600
|
48,000
|
|
Total on hand
|
100
|
|
$153,000
|
Prepare journal entries to record the cost of the 90 Millennium laptops sold on May 10, assuming that Hudson Computing uses the:
a. Specific identification method (62 of the units sold were purchased on April 9, and the remaining units were purchased on May 1).
b. Average-cost method.
c. FIFO method.
d. LIFO method.
e. Discuss briefly the financial reporting differences that may arise from choosing the FIFO method over the LIFO method.