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Hansen Company uses the periodic inventory method and had the following inventory information available: Units Unit Cost Total Cost 1/1 Beginning Inventory 100 $3 $300
Hansen Company uses the periodic inventory method and had the following inventory information available:
Units | Unit Cost | Total Cost | |||||||||
1/1 | Beginning Inventory | 100 | $3 | $300 | |||||||
1/20 | Purchase | 500 | $4 | 2,000 | |||||||
7/25 | Purchase | 100 | $5 | 500 | |||||||
10/20 | Purchase | 300 | $6 | 1,800 | |||||||
1,000 | $4,600 |
A physical count of inventory on December 31 revealed that there were 380 units on hand. Answer the following independent questions.
1. | Assume that the company uses the FIFO method. The value of the ending inventory at December 31 is | $ | |||
2. | Assume that the company uses the average cost method. The value of the ending inventory on December 31 is | $ | |||
3. | Assume that the company uses the LIFO method. The value of the ending inventory on December 31 is | $ | |||
4. (a) | Determine the difference in the amount of income that the company would have reported if it had used the FIFO method instead of the LIFO method | $ | |||
4. (b) | Would income have been greater or less? |
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