Question

E7-6 (Algo) Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost LO7-2 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 $5 1,830 Inventory, December 31, prior year For the current year: Purchase, March 21 Purchase, August 1 Inventory, December 31, current year 6,130 4,130 2,810 2 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.) FIFO LIFO Average Cost Ending inventory Cost of goods sold

Answer 1

FIFO LIFO Average cost S 5,620 S 13,070 S $36,310 S 28,860 S Ending Inventory Cost of Goods Sold 9,746 32,184 Notes: FIFO Method: Production Units=1,830+6,130+4,130 12,090 Ending Inventory Units = 2,810 Sale Units 12,090-2,810 9,280 Cost of Goods sold Unit Cost Total Particulars Units 5 S 4S 2 S Beginning December.31. prior year 1830 9,150 6130 March. 21 24,520 August.1 1320 2,640 9280 36,310 Ending Inventory (4,130-1,320)*$2 =S5,620

LIFO Method Cost of Goods sold Particulars Units Unit Cost Total 2 S 4 S August.1 4130 8,260 March 21 5150 20,600 9280 S 28,860 Ending Inventory= (6,130-5,150)*S4 +1,830*S5 =S13,070 Average Cost Method Weighted Avearge Unit Cost Unit Cost 5 S 4 S 2S Particulars Units Total Beginning December.31. prior year March 21 August.1 1830 9,150 6130 24,520 4130 8,260 S 41,930 12090 Total Cost/No of Units available for Sale Unit Cost $41,930/12,090 = S3.47 9,280 S3.47 $32,184 Cost of Goods Sold Ending Inventory 2,810*$3.47= S9,746 Il