E7-8 (Algo) Analyzing and Interpreting the Financial Statement Effects of Periodic FIFO, LIFO, and Weighted Average Cost [LO 7 - 3] Orion Iron Corporation tracks the number of units purchased and sold throughout each year but applies its inventory costing method at the end of the year, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions Units Unit Cost a. Inventory, Beginning 400 $ 15 For the year: b. Purchase, April 11 850 13 c. Purchase, June 1 750 17 d. Sale, May 1 (sold for $ 43 per unit) 400 e. Sale, July 3 (sold for $43 per unit) 510 f. Operating expenses ( excluding income tax expense), $18,900 Required: 1. Calculate the number and cost of goods available for sale. 2. Calculate the number of units in ending inventory. 3. Compute the cost of ending inventory and cost of goods sold under (a) FIFO, (b) LIFO, and (c) weighted average cost. 4. Prepare an income statement that shows under the
E7-8 (Algo) Analyzing and Interpreting the Financial Statement Effects of Periodic FIFO, LIFO, and Weighted Average Cost [LO 7 - 3] Orion Iron Corporation tracks the number of units purchased and sold throughout each year but applies its inventory costing method at the end of the year, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions Units Unit Cost a. Inventory, Beginning 400 $ 15 For the year: b. Purchase, April 11 850 13 c. Purchase, June 1 750 17 d. Sale, May 1 (sold for $ 43 per unit) 400 e. Sale, July 3 (sold for $43 per unit) 510 f. Operating expenses ( excluding income tax expense), $18,900 Required: 1. Calculate the number and cost of goods available for sale. 2. Calculate the number of units in ending inventory. 3. Compute the cost of ending inventory and cost of goods sold under (a) FIFO, (b) LIFO, and (c) weighted average cost. 4. Prepare an income statement that shows under the
Chapter1: Financial Statements And Business Decisions
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![E7-8 (Algo) Analyzing and Interpreting the Financial Statement Effects of Periodic FIFO,
LIFO, and Weighted Average Cost [LO 7-3] Orion Iron Corporation tracks the number of
units purchased and sold throughout each year but applies its inventory costing method
at the end of the year, as if it uses a periodic inventory system. Assume its accounting
records provided the following information at the end of the annual accounting period,
December 31. Transactions Units Unit Cost a. Inventory, Beginning 400 $ 15 For the
year: b. Purchase, April 11 850 13 c. Purchase, June 1 750 17 d. Sale, May 1 (sold for $
43 per unit) 400 e. Sale, July 3 (sold for $43 per unit) 510 f. Operating expenses (
excluding income tax expense), $18,900 Required: 1. Calculate the number and cost of
goods available for sale. 2. Calculate the number of units in ending inventory. 3.
Compute the cost of ending inventory and cost of goods sold under (a) FIFO, (b) LIFO,
and (c) weighted average cost. 4. Prepare an income statement that shows under the
FIFO method, LIFO method and weighted average method. 6. Which inventory costing
method minimizes income taxes?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8f5ba5c3-8733-4bac-acb6-7def9d10492b%2F515f8e06-02a3-4605-9f56-20737da03402%2F5ysml4i_processed.png&w=3840&q=75)
Transcribed Image Text:E7-8 (Algo) Analyzing and Interpreting the Financial Statement Effects of Periodic FIFO,
LIFO, and Weighted Average Cost [LO 7-3] Orion Iron Corporation tracks the number of
units purchased and sold throughout each year but applies its inventory costing method
at the end of the year, as if it uses a periodic inventory system. Assume its accounting
records provided the following information at the end of the annual accounting period,
December 31. Transactions Units Unit Cost a. Inventory, Beginning 400 $ 15 For the
year: b. Purchase, April 11 850 13 c. Purchase, June 1 750 17 d. Sale, May 1 (sold for $
43 per unit) 400 e. Sale, July 3 (sold for $43 per unit) 510 f. Operating expenses (
excluding income tax expense), $18,900 Required: 1. Calculate the number and cost of
goods available for sale. 2. Calculate the number of units in ending inventory. 3.
Compute the cost of ending inventory and cost of goods sold under (a) FIFO, (b) LIFO,
and (c) weighted average cost. 4. Prepare an income statement that shows under the
FIFO method, LIFO method and weighted average method. 6. Which inventory costing
method minimizes income taxes?
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