Orion Iron Corporation tracks the number of units purchased and sold throughout each year but applies its inventory costing me at the end of the year, as if it uses a periodic inventory system. Assume its accounting records provided the following informatio 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 $41 per unit) e. Sale, July 3 (sold for $41 per unit) 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. Units 300 Unit Cost $ 13 900 11 800 14 300 620 14 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?

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...
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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
a. Inventory, Beginning
For the year:
b. Purchase, April 11
c. Purchase, June 1
d. Sale, May 1 (sold for $41 per unit)
e. Sale, July 3 (sold for $41 per unit)
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.
Units
Unit Cost
300
$ 13
900
11
800
14
300
620
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.
Number of Goods Available for Sale
Cost of Goods Available for Sale
units
<Required 1
Required 2 >
Transcribed Image Text:s 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 a. Inventory, Beginning For the year: b. Purchase, April 11 c. Purchase, June 1 d. Sale, May 1 (sold for $41 per unit) e. Sale, July 3 (sold for $41 per unit) 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. Units Unit Cost 300 $ 13 900 11 800 14 300 620 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. Number of Goods Available for Sale Cost of Goods Available for Sale units <Required 1 Required 2 >
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