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Orion Iron Corporation tracks the number of units purchased and sold throughout each year but applies its inventory costing mem at the end of the year, as if it uses a periodic inventory system. Assume its accounting records provided the following informatiorm the end of the annual accounting period, December 31. Transactions Units 259 Unit Cost $ 10 a. Inventory, Beginning

Orion Iron Corporation tracks the number of units purchased and sold throughout each year but applies its inventory costing mem at the end of the year, as if it uses a periodic inventory system. Assume its accounting records provided the following informatiorm the end of the annual accounting period, December 31. Transactions Units 259 Unit Cost $ 10 a. Inventory, Beginning

FINANCIAL ACCOUNTING
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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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 Units 259 Unit Cost $ 10 a. Inventory, Beginning For the year: b. Purchase, April 11 600 12 e. Purchase, June 1 400 12 d. Sale, May 1 (sold for $45 per unit) 250 e. Sale, July 3 (sold for $45 per unit) 350 r. Operating expenses (excluding income tax expense), $18, 800 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, 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 income taxes? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 6 Calculate the number and cost of goods available for sale. units Number of Goods Available for Sale Cost of Goods Available for Sale
Transcribed Image Text: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 Units 259 Unit Cost $ 10 a. Inventory, Beginning For the year: b. Purchase, April 11 600 12 e. Purchase, June 1 400 12 d. Sale, May 1 (sold for $45 per unit) 250 e. Sale, July 3 (sold for $45 per unit) 350 r. Operating expenses (excluding income tax expense), $18, 800 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, 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 income taxes? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 6 Calculate the number and cost of goods available for sale. units Number of Goods Available for Sale Cost of Goods Available for Sale
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