Hahn Hardware provides the following information relating to its June inventory

Question

Hahn Hardware provides the following information relating to its June inventory activity. Hahn uses a perpetual inventory system. Required: If required, round your intermediate calculations and final answers to nearest cent. Use rounded amounts in subsequent computations.

a. Put Hahn's given information into a cost of goods sold model. What is unknown?

b. Compute the ending inventory and cost of goods sold using the FIFO, LIFO, and moving average costing methods.

FIFO LIFO Moving Average

Ending inventory $__ $__ $__

Cost of goods sold $__ $__ $__

c. Calculate the sum of the ending inventory and cost of goods sold for each method.

FIFO LIFO Moving Average

Beginning inventory $ __$__ $__

Purchases $__$__$__

Cost of goods available $__ $__ $__

Ending inventory $__$__$__

Cost of goods sold $ __$__ $__

Based on your calculations above, note whether FIFO, moving average or LIFO is appropriate for the following statements.

has the highest ending inventory and the lowest cost of goods sold.

The method expenses the least expensive inventory first.

method has ending inventory and cost of goods sold in between all three of the amounts.

has the lowest ending inventory and the highest cost of goods sold.

The method expenses the most expensive inventory first.

Explanation / Answer

Total Inventory Inward 61.00 Total Inventory Issued 49.00 Ending Inventory 12.00 FIFO stands for first in first out means rate of last remaining inventory will be used that is 11per unit. Thus, Ending inventory               12.00 Rate of Ending inventory 11.00 Value of ending inventory 132.00 Total cost of purchased inventory            591.50 Less: Ending inventory            132.00 Cost of goods sold            459.50 Ending inventory            132.00 Cost of goods sold            459.50 LIFO Method: Total Inventory Inward 61.00 Total Inventory Issued 49.00 Ending Inventory 12.00 LIFO stands for last in first out means rate of begining remaining inventory will be used that is 8per unit. Thus, Ending inventory               12.00 Rate of Ending inventory 8.00 Value of ending inventory 96.00 Total cost of purchased inventory            591.50 Less: Ending inventory 96.00 Cost of goods sold            495.50

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