**Orion Iron Corporation Inventory Analysis**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, assuming it uses a periodic inventory system. The information provided is as of the end of the annual accounting period, December 31.**Transactions:**- **Inventory, Beginning:** - Units: 350 - Unit Cost: $14- **For the Year:** - **Purchase, April 11:** - Units: 950 - Unit Cost: $12 - **Purchase, June 1:** - Units: 700 - Unit Cost: $16 - **Sale, May 1 (sold for $42 per unit):** - Units: 350 - **Sale, July 3 (sold for $42 per unit):** - Units: 670- **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.**3. **Compute the cost of ending inventory and cost of goods sold under:** - (a) FIFO - (b) LIFO - (c) Weighted average cost4. **Prepare an income statement that shows under the FIFO method, LIFO method, and weighted average method.**6. **Determine which inventory costing method minimizes income taxes.****Instructions:**- Complete each requirement by entering your answers in the provided tabs.- For Requirement 1, calculate: - **Number of Goods Available for Sale** - **Cost of Goods Available for Sale**Use the details and methods specified to analyze Orion Iron Corporation's inventory data effectively.

1) Calculation the number and cost of goods available for sale Particulars Date Units…

Answered: Orion Iron Corporation tracks the…

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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A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 430 units. Ending inventory at January 31 totals 170 units. Beginning inventory on January 1 Purchase on January 9 Purchase on January 25 Weighted Average - Perpetual: Goods purchased Required: Assume the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on the weighted average method. (Round your per unit costs to 2 decimal places.) Date January 1 January 9 Average cost January 25 Average cost January 26 Totals # of units Cost per unit Units Unit Cost 390 90 120 # of units sold $3.80 4.00 4.10 Cost of Goods Sold Cost per Cost of Goods unit Sold Inventory Balance Cost per unit # of units 390 @ $ 3.80 = Inventory Balance $1,482.00
The beginning inventory was 490 units at a cost of $8 per unit. Goods available for sale during the year were 1, 870 units at a total cost of $16,930. In May, 790 units were purchased at a total cost of $7,110. The only other purchase transaction occurred during October. Ending inventory was 835 units. Required: Calculate the number of units purchased in October and the cost per unit purchased in October. Assume the periodic inventory system is used. Calculate cost of goods sold and ending inventory using FIFO method. Assume the periodic inventory system is used. Calculate cost of goods sold and ending inventory using LIFO method.
s 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 $41 per unit) e. Sale, July 3 (sold for $41 per unit) f. Operating expenses (excluding income tax expense), $18,100 Required: 1. Calculate the number and cost of goods available for sale. 2. Calculate the number of units in ending inventory. Units Unit Cost 300 $ 13 900 11 800 14 300 620 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…
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Orion Iron Corp. 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 Units Unit Cost a. Inventory, Beginning For the year: b. Purchase, April 11 c. Purchase, June 1 d. Sale, May 1 (sold for $46 per unit) e. Sale, July 3 (sold for $46 per unit) f. Operating expenses (excluding income tax expense), $19,100 400 $18 800 10 700 19 400 530 Required: Calculate the cost of ending inventory and the cost of goods sold using the FIFO and LIFO methods. FIFO LIFO Cost of Ending Inventory Cost of Goods Sold
A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 280 units. Ending inventory at January 31 totals 130 units. Beginning inventory on January 1 Purchase on January 9 Purchase on January 25 Perpetual FIFO: Required: Assume the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on the FIFO method. Date January 1 January 9 January 25 January 26 Totals Goods purchased # of units Cost per unit Units Unit Cost 250 60 100 # of units sold $2.30 2.50 2.64 Cost of Goods Sold Cost per Cost of Goods unit Sold Inventory Balance Cost per unit # of units Inventory Balance
Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period 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 Beginning inventory, January 1 3,200 $ 45 Transactions during the year: a. Purchase, January 30 4,550 55 b. Sale, March 14 ($100 each) (2,850 ) c. Purchase, May 1 3,250 75 d. Sale, August 31 ($100 each) (3,300 ) Assuming that for the Specific identification method (item 1d) the March 14 sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the sale of August 31 was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1.
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Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, 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 Beginning inventory, January 1 Transactions during the year: a. Purchase, January 30 b. Sale, March 14 ($100 each). c. Purchase, May 1 d. Sale, August 31 ($100 each) Units Unit Cost 1,500 $ 40 2,900 52 (1,150) 1,600 (1,600) 70 Assuming that for Specific identification method (item 1d) the March 14 sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Required: 1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: a. Last-in, first-out. b. Weighted average cost. c. First-in, first-out. d.…
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Kirtland Corporation uses a periodic inventory system. At the end of the annual accounting period, December 31, the accounting records for the most popular item in inventory showed the following: Assessment Tool iFrame Transactions Beginning inventory, January 1 Transactions during the year: a. Purchase, January 30 b. Purchase, May 1 c. Sale ($5 each) d. Sale ($5 each) Units 400 Unit Cost $ 3.00 300 460 3.40 4.00 (160) (700) Required: a. Compute the amount of goods available for sale. b. & c. Compute the amount of ending inventory and cost of goods sold at December 31, under Average cost, First-in, first-out, Last-in, first-out and Specific identification inventory costing methods. For Specific identification, assume that the first sale was selected two- fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the second sale was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1. Complete this…

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