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 a. Inventory, Beginning For the year: b. Purchase, April 11 c. Purchase, June 1 d. Sale, May 1 (sold for $42 per unit) e. Sale, July 3 (sold for $42 per unit) f. Operating expenses (excluding income tax expense), $19,600 Required: 1. Calculate the number and cost of goods available for sale. 2. Calculate the number of units in ending inventory. Units Unit Cost 350 $ 14 950 12 700 16 350 670 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 6 Calculate the number and cost of goods available for sale. Number of Goods Available for Sale Cost of Goods Available for Sale units
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 a. Inventory, Beginning For the year: b. Purchase, April 11 c. Purchase, June 1 d. Sale, May 1 (sold for $42 per unit) e. Sale, July 3 (sold for $42 per unit) f. Operating expenses (excluding income tax expense), $19,600 Required: 1. Calculate the number and cost of goods available for sale. 2. Calculate the number of units in ending inventory. Units Unit Cost 350 $ 14 950 12 700 16 350 670 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 6 Calculate the number and cost of goods available for sale. Number of Goods Available for Sale Cost of Goods Available for Sale units
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text: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
a. Inventory, Beginning
For the year:
b. Purchase, April 11
c. Purchase, June 1
d. Sale, May 1 (sold for $42 per unit)
e. Sale, July 3 (sold for $42 per unit)
f. Operating expenses (excluding income tax expense), $19,600
Required:
1. Calculate the number and cost of goods available for sale.
2. Calculate the number of units in ending inventory.
Units
Unit Cost
350
$ 14
950
12
700
16
350
670
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?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Required 4
Required 6
Calculate the number and cost of goods available for sale.
Number of Goods Available for Sale
Cost of Goods Available for Sale
units
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