Orion Iron Corp. tracks the number of units purchased and sold throughout each y

Question

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 December 31 following information at the end of the annual accounting period ni Transactions Units Cost 350 $14 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), $19,600 950 700 350 670 12 16 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 Inventory units 3. Compute the cost of ending inventory and cost of goods sold under (a) FIFO, (b) LIFO, and (c) weighted average cost. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.) Cost of Ending Cost of Goods Inventory Sold FIFO LIFO Weighted Average Cost

Explanation / Answer

1) Calculate following :

2) Ending inventory = 2000-1020 = 980 units

3) Calculate following :

4) Prepare income statement :

6) LIFO Method minimize income tax.

Number of goods available for sale 2000 units Cost of goods available for sale 27500

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