Question

During the year, TRC Corporation has the following inventory transactions.

Date Transaction Number of Units Unit Cost Total Cost
Jan. 1 Beginning inventory 41 $ 33 $ 1,353
Apr. 7 Purchase 121 35 4,235
Jul. 16 Purchase 191 38 7,258
Oct. 6 Purchase 101 39 3,939
454 $16,785
For the entire year, the company sells 410 units of inventory for $51 each.
Exercise 6-4A Part 2
2. Using LIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.

Answer 1

Ending Inventory = $1,716.00

Cost of Sales = $15,069.00

Sales Revenue = $20,910.00

Gross Profit = $5,841.00

Step-by-step explanation:

FIFO Method assumes that the first goods received by the busines will be the first ones to be delivered to the final customer.

Ending Inventory :

Under FIFO, any remaining inventory will be valued as if they were the latest goods purchased.

Ending Inventory : 44 units × $39.00 = $1,716.00

Cost of Goods Sold Calculation :

Cost of Sales : 41 units × $33.00 = $1,353.00

121 units × $35.00 = $4,235.00

191 units × $38.00 = $7,258.00

57 units × $39.00 = $2,223.00

Total = $15,069.00

Sales Revenue Calculation ;

Sales Revenue = Units Sold × Selling Price

= 410 units × $51

= $20,910.00

Gross Profit Calculation :

Sales $20,910.00

Less Cost of Goods Sold ($15,069.00)

Gross Profit $5,841.00