Problem 4 (Periodic Inventory Analysis) Ending Inventory an…
Problem 4 (Periodic Inventory Analysis) Ending Inventory and Net Income Using Periodic Costing: 3 Methods Hayes 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 5/25 Purchase 100 $5 500 6/20 Purchase 300 $6 1,800 1,000 $4,600 A physical count of inventory on June 30 revealed that there were 380 units on hand. Instructions Required: Answer the following four independent questions and show computations supporting your answers. Assume that the company uses the FIFO method. The value of the ending inventory at June 30 is $__________. Assume that the company uses the average-cost method. The value of the ending inventory on June 30 is $__________. Assume that the company uses the LIFO method. The value of the ending inventory on June 30 is $__________. 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. Would income have been greater or less?
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