Question

# Orion Iron Corp. tracks the number of units purchased and sold throughout each year but applies...

 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.
Transactions Units Unit Cost
a. Inventory, Beginning 300 \$ 12
For the year:
b. Purchase, April 11 900 10
c. Purchase, June 1 800 13
d. Sale, May 1 (sold for \$40 per unit) 300
e. Sale, July 3 (sold for \$40 per unit) 600
f. Operating expenses (excluding income tax expense), \$19,500

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 Inventory. Cost of Goods Sold

FIFO ? ?

LIFO ? ?

Weighted Average Cost. ? ?

 4. Prepare an Income Statement that shows under the FIFO method, LIFO method and weighted average method. ORION IRON CORP.Income StatementFor the Year Ended December 31 FIFO LIFO Weighted Average Income from operations

 Transactions Units Unit Cost Total cost a. Inventory, Beginning 300 12 3600 \$ For the year: b. Purchase, April 11 900 10 9000 c. Purchase, June 1 800 13 10400 Total 2000 \$23000 ans Number of Goods Available for Sale. 2000 Cost of Goods Available for Sale. 23000 ans 2 ending Inventory (2000-300-600) 1100 Ans 3 Costof Ending Inventory cost of good sold FIFO 13400 9600 (800*13)+(300*10) (300*12)+(600*10) LIFO 11600 11400 (300*12)+(800*10) (100*10)+(800*13) Weighte avg cost 12650 10350 (23000/2000)=11.5 (11.5*1100) (11.5*900) ans 4 FIFO LIFO Weighted avg Sales (300*40)+(600*40) 36000 36000 36000 Less: Cost of good sold 9600 11400 10350 Gross profit 26400 24600 25650 Operating expenses 19500 19500 19500 Income from operations 6900 5100 6150

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