Question

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. (Assume beginning inventory under LIFO was 28,000 units with a cost of $13.40). 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 $18,000.

Answer 1

This detailed answer explains how to calculate ending inventory and cost of goods sold using FIFO and LIFO, as well as how to calculate the LIFO reserve and record the adjusting entry.

Step-by-step explanation:

1. To calculate ending inventory and cost of goods sold using the first-in, first-out (FIFO) method under a perpetual inventory system, we need to determine the cost of each unit sold.

2. To calculate ending inventory and cost of goods sold using the last-in, first-out (LIFO) method under a periodic inventory system, we need to consider the cost of units sold based on the assumption that the most recent units purchased are the first ones to be sold.

3. The LIFO reserve at the end of the year can be calculated by subtracting the ending inventory value calculated using FIFO from the ending inventory value calculated using LIFO.

4. To record the year-end adjusting entry for the LIFO reserve, we would debit the LIFO reserve account and credit the retained earnings account with the difference between the LIFO reserve at the end of the year and the LIFO reserve at the beginning of the year.

Answer 2

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

FIFO 1.226.400

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. (Assume beginning inventory under LIFO was 28,000 units with a cost of $13.40

LIFO 1.204.000

Step-by-step explanation:

Jan. 1 Inventory on hand—28,000 units; cost $13.90 each.

Feb. 12 Purchased 78,000 units for $14.20 each.

Apr. 30 Sold 50,000 units for $21.70 each.

Jul. 22 Purchased 58,000 units for $14.50 each.

Sep. 9 Sold 78,000 units for $21.70 each.

Nov. 17 Purchased 48,000 units for $14.90 each.

Dec. 31 Inventory on hand—84,000 units.

FIFO

Begginnin inventory 28000 13.4 375200

Purchased 78000 14.2 1107600

Sold 50000

Sold 28000 13.4 375200

Sold 22000 14.2 312400

Inventory 56000 14.2 795200

Purchased 58000 14.5 841000

Sold 78000

Sold 20000 14.2 284000

Sold 58000 14.5 841000

Inventory 36000 14.2 511200

Purchased 48000 14.9 715200

Ending Inventory 84000

LIFO

Begginnin inventory 28000 13.4 375200

Purchased 78000 14.2 1107600

Sold 50000

Sold 50000 14.2 710000

Inventory 28000 13.4

Inventory 28000 14.2 397600

Purchased 58000 14.5 841000

Sold 78000

Sold 20000 14.2 284000

Sold 58000 14.5 841000

Inventory 28000 13.4 375200

Inventory 8000 14.2 113600

Purchased 48000 14.9 715200

Ending Inventory 84000 1204000