**Orlon Iron Corporation Inventory and Costing Analysis**Orlon 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 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:**| Transactions | Units | Unit Cost ||--------------------------|-------|-----------|| a. Inventory, Beginning | 250 | $10 || **For the year:** | | || b. Purchase, April 11 | 600 | $12 || c. Purchase, June 1 | 480 | $12 || d. Sale, May 1 (sold for $45 per unit) | 250 | || e. Sale, July 3 (sold for $45 per unit)| 350 | || f. Operating expenses (excluding income tax expense) | | $18,000 |**Tasks:**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.5. Which inventory costing method minimizes income taxes?**Instructions:**- Complete this question by entering your answers in the tabs below.- **Required 1:** - Calculate the number and cost of goods available for sale. - **Inputs:** - Number of Goods Available for Sale: ______ units - Cost of Goods Available for Sale: ______- **Required 2:** - Proceed to next calculation step.(Note: Ensure to plug in the numbers in the blanks provided as per the calculation steps in your coursework or study module guidelines.)

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Answered: Orlon 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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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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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 $47 per unit) e. Sale, July 3 (sold for $47 per unit) f. Operating expenses (excluding income tax expense), $18,700 Required: Units 300 Unit Cost $ 19 900 17 800 20 300 680 Calculate the cost of ending inventory and the cost of goods sold using the FIFO and LIFO methods. FIFO LIFO Cost of Ending Inventory $ 19,740 Cost of Goods Sold $ 17,260 $ 18,700
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