Question

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	1,930	$7
For the year 2015:
Purchase, March 21	6,180	6
Purchase, August 1	4,070	4
Inventory, December 31, 2015	2,800

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.)

	FIFO	LIFO	Average Cost
Ending Inventory
Cost of Goods Sold

Answer 1

	Units	Unit cost	$
	Inventory,December 31,2014	1930	7	13510
	Purchases, March 21	6180	6	37080
	Purchases, August 1	4070	4	16280
	Total	12180		66870
	Inventory,December 31,2015	2800
1	Under FIFO Method	$
	Inventory,December 31,2015 ( 2,800 units x $ 4 )	11200
	Cost of goods sold ( $ 66,870 – $ 11,200)	55670
2	Under LIFO Method	$
	Inventory,December 31,2015 [( 1,930 units x $ 7)+ (870 units x $ 6)]	18730
	Cost of goods sold ( $ 66,870 – $ 18,730)	48140
3	Under Average Cost Method	$
	Inventory,December 31,2015 {($ 66,870/12,180 units )x 2,800 units}	15372
	Cost of goods sold ( $ 66,870 – $ 15,372)	51498

	FIFO	LIFO	Average Cost
Ending Inventory	11200	18730	15372
Cost of Goods Sold	55670	48140	51498