Harrington Company had the following data for inventory during a recent year: Assume that Harrington uses a
Question:
Assume that Harrington uses a periodic inventory accounting system.
Required:
1. Using the FIFO, LIFO, and average cost methods, compute the ending inventory and cost of goods sold.
2. Which method will produce the most realistic amount for income? For inventory?
3. Which method will produce the lowest amount paid for taxes?
Transcribed Image Text:
Cost per Unit Total Cost Units Beginning inventory Purchase 1, Jan. 28 Purchase 2, May 2 Purchase 3, Aug 13 Purchase 4, Nov. 9 Total purchases Goods available for sale Less: Sales Ending inventory $ 9.00 500 $ 4,500 1,600 1,200 1,400 1,100 $15,040 10.20 10.80 11.30 12,240 15,120 12,430 54,830 $59,330 5,800 (5,240) 560
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1 FIFO Cost of goods sold 5240 units 500 900 4500 1600 940 15040 1200 1020 12240 1400 1080 15120 540 ...View the full answer
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