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Hamilton Company uses a periodic inventory system. At the end of the annual accounting period, December 31, 2015, the accounting records provided the following information for product 1: Units Unit Cost Inventory, December 31, 2014 1,970 $7 For the year 2015: Purchase, March 21 6,070 6 Purchase, August 1 4,140 4 Inventory, December 31, 2015 2,910
Hamilton Company uses a periodic inventory system. At the end of the annual accounting period December 31, 2015, the accounting records provided the following information for product 1 1,970 $7 Inventory, December 31, 2014 For the year 2015 Purchase, March 21 Purchase, August 1 6,070 4,140 2,910 Inventory, December 31, 2015 Required Compute ending inventory and cost of goods sold under FIFO, LIFO, and average cost inventory costing methods. (Do not round intermediate calculations and round your final answers to the nearest dollar amount.) Average Cost FIFO LIFO Ending inventory Cost of goods sold 11,640 S 55,130 $ 17,930$ 47,340S 16,490 48,102 $
Expert Answer
| Units | Unit cost | $ | ||
| Inventory,December 31,2014 | 1,970 | 7 | 13,790 | |
| Purchases, March 21 | 6,070 | 6 | 36,420 | |
| Purchases, August 1 | 4,140 | 4 | 16,560 | |
| Total | 12,180 | 66,770 | ||
| Inventory,December 31,2015 | 2,910 | |||
| 1 | Under FIFO Method | $ | ||
| Inventory,December 31,2015 ( 2,910 units x $ 4 ) | 11,640 | |||
| Cost of goods sold ( $ 66,770 – $ 11,640) | 55,130 | |||
| 2 | Under LIFO Method | $ | ||
| Inventory,December 31,2015 [( 1,970 units x $ 7)+ (940 units x $ 6)] | 19,430 | |||
| Cost of goods sold ( $ 66,770 – $ 19,430) | 47,340 | |||
| 3 | Under Average Cost Method | $ | ||
| Inventory,December 31,2015 {($ 66,770/12,180 units )x 2,910 units} | 15,947 | |||
| Cost of goods sold ( $ 66,770 – $ 15,947) | 50,823 |
