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. TransactionsUnitsUnit Costa. Inventory, Beginning300$ 13For the year: b. Purchase, April 1190011c. Purchase, June 180014d. Sale, May 1 (sold for $41 per unit)300 e. Sale, July 3 (sold for $41 per unit)620 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.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?

Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Answered: Orion Iron Corporation tracks the…

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter7: Inventories

Section: Chapter Questions

Problem 4PB: The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are...

See similar textbooks

Related questions

Question

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	Unit Cost
a. Inventory, Beginning	300	$ 13
For the year:
b. Purchase, April 11	900	11
c. Purchase, June 1	800	14
d. Sale, May 1 (sold for $41 per unit)	300
e. Sale, July 3 (sold for $41 per unit)	620
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.
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?