Question

Required Information (The following information applies to the questions displayed below.) During the year, TRC Corporation has the following Inventory transactions Part 1 of 4 Number of Unit Cont s 33 Date Transaction Jan. 1 Beginning inventory Apr. 7 Purchase Jul.16 Purchase Oct. 6 Purchase Total Cost 1.353 4,235 7.258 3.939 $16,785 points For the entire year, the company sells 410 units of Inventory for $51 each. Required: 1. Using FIFO, calculate ending Inventory, cost of goods sold, sales revenue, and gross profit. FIFO Cost of Goods Sold Ending Inventory Cost of Goods Available for Sale Cost of of units Cost per Goods unit Available for Sale 413 33 1.353 of units Cost per Cost of Goods Sold # of units Cost 0 Ending per unit Inventory unit 4 15 33 $ 1.353 41 $ 33 $ 1,353 20 5 35 700 Beginning inventory Purchases: Apt.7 Jul.16 Oct Total 121S 1915 1017 S 454 35 38 39 S 4.235. 101 7.258 191 3,939 101 16,785393 S $ $ 35 38 39 3,535 7.258 3,939 16,085 $ S 2.053 Sales revenue Gross profit $ S 4,141 20.910

Answer 1

1	FIFO	Cost of goods available for sale			Cost of goods sold			Ending Inventory
		# of units    (A)	Cost per unit	Cost of goods available for sale	# of units sold               (B)	Cost per unit	Cost of goods sold	# of units in ending inventory      (A) - (B)	Cost per unit	Ending Inventory
	Beginning Inventory	41	$              33	$        1,353	41	$              33	$        1,353	-	$              33	$               -
	Purchases:
	Apr-07	121	$              35	$        4,235	121	$              35	$        4,235	-	$              35	$               -
	Jul-16	191	$              38	$        7,258	191	$              38	$        7,258	-	$              38	$               -
	Oct-06	101	$              39	$        3,939	57	$              39	$        2,223	44	$              39	$        1,716
		454		$     16,785	410		$     15,069	44		$        1,716
	Sales revenue	=	$     20,910
	(410 X $51)
	Gross Profit	=	$        5,841
	($20910 - $15069)
2	LIFO	Cost of goods available for sale			Cost of goods sold			Ending Inventory
		# of units    (A)	Cost per unit	Cost of goods available for sale	# of units sold               (B)	Cost per unit	Cost of goods sold	# of units in ending inventory      (A) - (B)	Cost per unit	Ending Inventory
	Beginning Inventory	41	$              33	$        1,353	-	$              33	$               -	41	$              33	$        1,353
	Purchases:
	Apr-07	121	$              35	$        4,235	118	$              35	$        4,130	3	$              35	$           105
	Jul-16	191	$              38	$        7,258	191	$              38	$        7,258	-	$              38	$               -
	Oct-06	101	$              39	$        3,939	101	$              39	$        3,939	-	$              39	$               -
		454		$     16,785	410		$     15,327	44		$        1,458
	Sales revenue	=	$     20,910
	(410 X $51)
	Gross Profit	=	$        5,583
	($20910 - $15327)
3	Weighted Average cost	Cost of goods available for sale			Cost of goods sold			Ending Inventory
		# of units    (A)	Cost per unit	Cost of goods available for sale	# of units sold               (B)	Cost per unit	Cost of goods sold	# of units in ending inventory      (A) - (B)	Cost per unit	Ending Inventory
	Beginning Inventory	41		$        1,353
	Purchases:
	Apr-07	121		$        4,235
	Jul-16	191		$        7,258
	Oct-06	101		$        3,939
		454	$   36.9714	$     16,785	410	$   36.9714	$     17,603	44	$   36.9714	$        1,889
	Sales revenue	=	$     20,910
	(410 X $51)
	Gross Profit	=	$        3,307
	($20910 - $17603)
	*Average Cost	=	Cost of goods available for sale / No. Of units
		=	$16785 / 454 units
		=	$   36.9714
	FIFO method will result in higher profitability in case when inventory cost is rising