E7-6 Analyzing and Interpreting the Financial Statement Effects of Periodic FIFO

Question

E7-6 Analyzing and Interpreting the Financial Statement Effects of Periodic FIFO, LIFO, and Weighted Average Cost LO 7-3] Orion Iron Corp. 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 Unit Transactions Units Cost 300 $12 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), $19,500 900 10 800 13 300 600 Required 1. Calculate the number and cost of goods available for sale Number of Goods Available for Sale units Cost of Goods Available for Sale 2. Calculate the number of units in ending inventory. Ending Invent units

Explanation / Answer

1.

2.

3.

4.

6. LIFO

Since the income from operations is the lowest under LIFO, the same minimizes income taxes.

Working:

Number of Goods Available for Sale 2000 units Cost of Goods Available for Sale $             23,000

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.