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 years b. Purchase, April 11 c. Purchase, June 1 d. Sale, May 1 (sold for $38 per unit) . Sale, July 3 (sold for $38 per unit) f. Operating expenses (excluding income tax expense), $19,000 Cost of Ending Inventory Cost of Goods Sold FIFO Units 500 LIFO 500 700 500 520 Required: Calculate the cost of ending inventory and the cost of goods sold using the FIFO and LIFO methods. Unit Cost $ 10 12
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 years b. Purchase, April 11 c. Purchase, June 1 d. Sale, May 1 (sold for $38 per unit) . Sale, July 3 (sold for $38 per unit) f. Operating expenses (excluding income tax expense), $19,000 Cost of Ending Inventory Cost of Goods Sold FIFO Units 500 LIFO 500 700 500 520 Required: Calculate the cost of ending inventory and the cost of goods sold using the FIFO and LIFO methods. Unit Cost $ 10 12
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
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 $38 per unit)
e. Sale, July 3 (sold for $38 per unit)
f. Operating expenses (excluding income tax expense), $19,000
Cost of Ending Inventory
Cost of Goods Sold
FIFO
Units
500
LIFO
500
700
500
520
Required:
Calculate the cost of ending inventory and the cost of goods sold using the FIFO and LIFO methods.
Unit Cost
$ 10
8
12
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