Question:
Hazelton Corporation uses a periodic inventory system and the LIFO method to value its inventory. The company began 2013 with $59,000 in inventory of its only product. The beginning inventory consisted of the following layers:
4000 units @ 6 = 24,000
6000 units @ 7 = 35,000
total 59,000
During 2013, 6,000 units were purchased at $8 per unit and during 2014, 7,000 units were purchased at $9 per unit. Sales, in units, were 7,000 and 12,000 during 2013 and 2014, respectively.
Required:
1. Calculate cost of goods sold for 2013 and 2014.
2. Disregarding income tax, determine the LIFO liquidation profit or loss, if any, for 2013 and 2014.