Question

Hamilton Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Units Unit Cost $6 1,990 Inventory, December 31, prior year For the current year: Purchase, March 21 Purchase, August 1 Inventory, December 31, current year 6,000 4,070 2,950 Required: Compute ending inventory and cost of goods sold under FIFO, LIFO, and average cost inventory costing methods. (Round "Average cost per unit" to 4 decimal places and final answers to nearest whole dollar amount.) Answer is not complete. L IFO Average Cost Ending inventory Cost of goods sold $ $ FIFO 8,850 45,300

Answer 1

Solution

	FIFO	LIFO	Weighted Average
Ending Inventory	$                 8,850	$                 16,740	$           13,246
Cost of Goods Sold	$               45,300	$                 37,410	$           40,904

Working

	Units	Cost per unit	value
Beginning Balance	1990	$                     6.00	$ 11,940
Purchases
	6000	$                     5.00	$ 30,000
	4070	$                     3.00	$ 12,210
Total	12060		$ 54,150

.

Average Cost of Inventory
Units	(A)	12060
Total Cost	(B)	$ 54,150
Average Cost	(C=B/A)	$ 4.49

.

FIFO
Total Units Available for sale		12060
Units Sold		9110
Closing Stock in Units		2950
Valuation
Ending Inventory	2950	@	$               3.00	$ 8,850
	0	@	$       2,040.00	$ 0
Value Of Ending Inventory				$ 8,850
Cost of Goods sold				$ 45,300
LIFO
Total Units Available for sale		12060
Units Sold		9110
Closing Stock in Units		2950
Valuation
Ending Inventory	1990	@	$               6.00	$ 11,940
	960	@	$               5.00	$ 4,800
Value Of Ending Inventory				$            16,740
Cost of Goods sold	54150 minus 16740			$            37,410
Weighted Average method
Total Units Available for sale		12060
Units Sold		9110
Closing Stock in Units		2950
Valuation
Ending Inventory	2950	@	$               4.49	$            13,246
Value Of Ending Inventory				$            13,246
Cost of Goods sold	(Total Purchase and opening stock Minus Closing Stock)			$            40,904