Detailed comparison of various choices for inventory accounting. Hartison Corporation commenced retailing operations on January 1. Year I. It made purchases of merchandise inventory during Year I and Year 2 as follows:

1/10/Year 1 1,200 6/30/Year 1 700 10/20/Year 1 400 Total Year 1 2,300 Quantity Purchased 2/18/Year 2 600 7/15Aear 2 1,200 12/15/Year 2 800 Total Year 2 2,600 Unit Price Acquisition Cost $10 12 13 $12,000 8,400 5,200 $25,600 Unit Price Acquisition Cost $15 16 18 $ 9,000 19,200 14,400 $42,600

a. Calculate the cost of goods sold for Year 1 using a FIFO cost flow assumption.

b. Calculate the cost of goods sold for Year 1 using a LIFO cost flow assumption.

c. Calculate the cost of goods sold for Year 1 using a weighted-average cost flow assumption.

d. Calculate the cost of goods sold for Year 2 using a FIFO cost flow assumption.

e. Calculate the cost of goods sold for Year 2 using a LIFO cost flow assumption.

f. Calculate the cost of goods sold for Year 2 using a weighted-average cost flow assumption.
g. For the two years taken as a whole, will FIFO or LIFO result in reporting the larger net income? What is the difference in net income for the two-year period under FIFO as compared with LIFO? Assume an income tax rate of 40 percent for both years.
h. Which method, LIFO or FIFO, should Hartison Corporation probably prefer and why?