(APPENDIX 6B) INVENTORY COSTING METHODS: PERIODIC SYSTEM Harrington Company had the following data for inventory during a recent year:

Units Cost per Unit Total Cost Beginning inventory 500 $ 9.00 $ 4,500 Purchase 1, 1/28 1,600 9.60 $15,360 Purchase 2, 5/2 1,200 10.30 12,360 Purchase 3, 8/13 1,400 10.80 15,120 Purchase 4, 11/9 1,100 11.10 12,210 Total purchases 5,300 55,050 Goods available for sale 5,800 $59,550 Less: Sales 5,240 Ending inventory 560 Assume that Harrington uses a periodic inventory accounting system.

Required:

. Using the FIFO, LIFO, and average cost methods, compute the ending inventory and cost of goods sold. (Use four decimal places for per unit calculations and round all other numbers to the nearest dollar.)

. Which method will produce the most realistic amount for income? For inventory?

. Which method will produce the lowest amount paid for taxes?

Problem Set A