Question

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To more efficiently manage its Inventory, Treynor Corporation maintains its Internal Inventory records using first-In, first-out (FIFO) under a perpetual Inventory system. The following Information relates to its merchandise Inventory during the year: Jan. 1 Inventory on hand-20,000 units; cost $13.10 each. Feb. 12 Purchased 70,000 units for $13.40 each. Apr. 30 Sold 50, 800 units for $20.99 each. Jul. 22 Purchased 5e,eee units for $13.70 each. Sep. 9 Sold 79,800 units for $20.99 each. Nov. 17 Purchased 40,000 units for $14.10 each. Dec. 31 Inventory on hand-60, eee units. Required: 1. Determine the amount Treynor would calculate Internally for ending Inventory and cost of goods sold using first-In, first-out (FIFO) under a perpetual Inventory system. 2. Determine the amount Treynor would report externally for ending Inventory and cost of goods sold using last-In, first-out (LIFO) under a periodic Inventory system. 3. Determine the amount Treynor would report for its LIFO reserve at the end of the year. 4. Record the year-end adjusting entry for the LIFO reserve, assuming the balance at the beginning of the year was $10,000. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Determine the amount Treynor would calculate internally for ending inventory and cost of goods sold using first-in, first-out (FIFO) under a perpetual inventory system. (Round "Cost per Unit" to 2 decimal places.) Cost of Goods Available for Sale Cost of Goods Sold - April 30 Cost of Goods Sold - September 9 Inventory Balance Perpetual FIFO: # of units Cost per unit Cost of Goods Available for Sale # of units sold Cost per unit Cost of Goods Sold # of units sold Cost per unit Cost of Goods Sold Total Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory Beg. Inventory Purchases: February 12 July 22 November 17 Total Required 1 Required 2 >

Answer 1

FIFO

	Cost of Goods Available for sale			Cost of Goods Sold - April 30			Cost of Goods Sold - Sep 9			Ending Inventory
Date	No of Units	Cost per unit	Cost of Goods Available for sale	No of Units	Cost per unit	Cost of Goods Sold	No of Units	Cost per unit	Cost of Goods Sold	No of units	Cost per unit	Ending Inventory
Jan-01	20000	$     13.10	$         262,000	20000	$              13.10	$            262,000
Feb-12	70000	$     13.40	$         938,000	30000	$              13.40	$            402,000	40000	$             13.40	$    536,000
Jul-22	50000	$     13.70	$         685,000				30000	$             13.70	$    411,000	20000	$         13.70	$    274,000
Nov-17	40000	$     14.10	$         564,000							40000	$         14.10	$    564,000
Total	180000		$      2,449,000	50000		$            664,000	70000		$    947,000	60000		$    838,000

LIFO (Periodic)

	Cost of Goods Available for sale			Cost of Goods Sold			Ending Inventory
Date	No of Units	Cost per unit	Cost of Goods Available for sale	No of Units	Cost per unit	Cost of Goods Sold	No of Units	Cost per unit	Cost of Goods Sold
Jan-01	20000	$     13.10	$         262,000				20000	$             13.10	$    262,000
Feb-12	70000	$     13.40	$         938,000	30000	$              13.40	$            402,000	40000	$             13.40	$    536,000
Jul-22	50000	$     13.70	$         685,000	50000	$              13.70	$            685,000
Nov-17	40000	$     14.10	$         564,000	40000	$              14.10	$            564,000
Total	180000		$      2,449,000	120000		$        1,651,000	60000		$    798,000

LIFO Reserve = FIFO Inventory - LIFO Inventory
= $838000 - $798000 = $40000

Account Titles	Debit	Credit
Cost of Goods Sold	$         30,000		=40000-10000
LIFO Reserve		$         30,000