Question

Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question Exercise 8-19 (Static) Perpetual FIFO adjusted to periodic LIFO; LIFO reserve [LO8-1, 8-4, 8-6] 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: points Jan. 1 Inventory on hand 20,000 units; cost $12.20 each. Feb. 12 Purcbaged 70.000 units for $12.50 each. Apr. 30 Sold 50,000 units for $20.00 each. Jul. 22 Purchased 50,000 units for $12. BO cach. Sen. 9 Sold 70.000 units for $20.00 each Nov. 17 Purchased 40,000 units for $13.20 sach. Dec. 31 Inventory on hand-60,000 units. tors20-09 each 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. Answer is complete but not entirely correct. 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. ( places.)

PLEASE CORRECT WRONG ANSWERS.

Answer 1

1) Using Perpetual Inventory- FIFO

Date	Cost of goods available for sale			Cost of goods sold-April 30			Cost of goods sold-Sep 09			Inventory
	# of units	Cost per unit	Cost of goods available for sale	# of unit	Cost per unit	Cost of goods sold	# of unit	Cost per unit	Cost of goods sold	# of unit in ending inventory	Cost per unit	Ending inventory value
Beg. Inventory	20,000	12.20	2,44,000	20,000	12.20	2,44,000
Purchases:
Feb-12	70,000	12.50	8,75,000	30,000	12.50	3,75,000	40,000	12.50	5,00,000
Jul-22	50,000	12.80	6,40,000				30,000	12.80	3,84,000	20,000	12.80	$ 2,56,000
Nov-17	40,000	13.20	5,28,000							40,000	13.20	$ 5,28,000
Total	1,80,000		22,87,000	50,000		6,19,000	70,000		8,84,000	60,000		7,84,000

2) Using Periodic Inventory -LIFO

Date	Cost of goods available for sale			Cost of goodss sold-Periodic LIFO			Ending Inventory Periodic LIFO
	# of units	Cost per unit	Cost of goods available for sale	# of unit	Cost per unit	Cost of goods sold	# of unit in ending inventory	Cost per unit	Ending inventory value
Beg. Inventory	20,000	12.20	2,44,000				20,000	12.20	2,44,000
Purchases:
Feb-12	70,000	12.50	8,75,000	30,000	12.50	3,75,000	40,000	12.50	$      5,00,000
Jul-22	50,000	12.80	6,40,000	50,000	12.80	6,40,000
Nov-17	40,000	13.20	5,28,000	40,000	13.20	5,28,000
Total	1,80,000		22,87,000	1,20,000		15,43,000	60,000		7,44,000

3)

LIFO Reserve	=	FIFO Inventory balance- LIFO Inventory balance
		$784,000 - $744,0000
LIFO reserve		$        40,000

4)

LIFO effect
Closing balance in LIFO Resereve	$        40,000
Opening balance in LIFO Resereve	$        10,000
LIFO effect	$        30,000

Cost of goods sold	(40,000-10000) $        30,000
LIFO allowance		$        30,000