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 Inventory, December 31, prior year 1,930 $ 6 For the current year: Purchase, March 21 6,010 5 Purchase, August 1 4,120 3 Inventory, December 31, current year 2,900 Required: Compute ending inventory and cost of goods sold under FIFO, LIFO, and average cost inventory costing metho

Answer 1

	Unit	Unit cost	Total
Beginning inventory	1930	6	11580
Purchase march 21	6010	5	30050
Purchase august 1	4120	3	12360
Total	12060		53990

Calculate ending inventory and cost of goods sold

	FIFO	LIFO	Average cost
Cost of ending inventory	2900*3 = 8700	(1930*6+970*5) = 16430	53990/12060*2900 = 12983
Cost of goods sold	53990-8700 = 45290	53990-16430 = 37560	53990-12983 = 41007