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FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Orion Iron Corporation tracks the number of units purchased and sold throughout each year but applies its inventory costing method perpetually at the time of each sale, as if it uses perpetual inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions a. Inventory, Beginning For the year: b. Purchase, April 11 c. Purchase, June 1 d. Sale, May 1 (sold for $40 per unit) e. Sale, July 3 (sold for $40 per unit) f. Operating expenses (excluding income tax expense), $18,600 Required: Units 400 Unit Cost $ 12 850 10 750 14 400 670 11 Calculate the cost of ending inventory and the cost of goods sold using the FIFO and LIFO methods. Cost of Ending Inventory Cost of Goods Sold $ FIFO 11,500 $ LIFO 13,380
Transcribed Image Text:Orion Iron Corporation tracks the number of units purchased and sold throughout each year but applies its inventory costing method perpetually at the time of each sale, as if it uses perpetual inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions a. Inventory, Beginning For the year: b. Purchase, April 11 c. Purchase, June 1 d. Sale, May 1 (sold for $40 per unit) e. Sale, July 3 (sold for $40 per unit) f. Operating expenses (excluding income tax expense), $18,600 Required: Units 400 Unit Cost $ 12 850 10 750 14 400 670 11 Calculate the cost of ending inventory and the cost of goods sold using the FIFO and LIFO methods. Cost of Ending Inventory Cost of Goods Sold $ FIFO 11,500 $ LIFO 13,380
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