E7-6 Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost LO7-2...

E7-6 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
Inventory, December 31, prior year	1,810		$	8
For the current year:
Purchase, March 21	6,020			7
Purchase, August 1	4,010			5
Inventory, December 31, current year	2,920
Find LIFO cost of goods sold. Please show your work.

Expert Solution

	Units	Cost per unit	value
Opening Stock	1810	$ 8.00	$ 14,480.00
Purchases
21-Mar	6020	$ 7.00	$ 42,140.00
1-Aug	4010	$ 5.00	$ 20,050.00

	11840		$ 76,670.00

Average Cost of Inventory
Units	(A)	11840
Total Cost	(B)	$ 76,670.00
Average Cost	(C=B/A)	6.476

FIFO
Total Units Avalable for sale		11840
Units Sold		8920
Closing Stock in Units		2920

Valuation
Closing stock	2920	@	$ 5.00	$ 14,600.00


Value Of Closing Stock				$ 14,600.00

Cost of Goods sold	(76670-14600)			$ 62,070.00

LIFO
Total Units Avalable for sale		11840
Units Sold		8920
Closing Stock in Units		2920

Valuation
Closing stock	1110	@	$ 7.00	$ 7,770.00
	1810	@	$ 8.00	$ 14,480.00
Value Of Closing Stock				$ 22,250.00

Cost of Goods sold	(76670-22250)			$ 54,420.00

Average
Total Units Available for sale		11840
Units Sold		8920
Closing Stock in Units		2920

Valuation
Closing stock	2920	@	$6.476	$ 18,908.48

Value Of Closing Stock				$ 18,908.480

Cost of Goods sold	(Total Purchase and opening stock Minus Closing Stock)			$ 57,761.52

	FIFO	LIFO	Average
Ending Inventory	$ 14,600.00	$ 22,250.00	$ 18,908.480
Cost of Goods Sold	$ 62,070.00	$ 54,420.00	$ 57,761.52

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