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Orion Iron Corp. tracks the number of units purchased and sold throughout each year but applies its inventory costing method at the end of the

Orion Iron Corp. tracks the number of units purchased and sold throughout each year but applies its inventory costing method at the end of the year, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31.

Transactions Units Unit Cost
a. Inventory, Beginning 250 $ 10
For the year:
b. Purchase, April 11 600 12
c. Purchase, June 1 400 12
d. Sale, May 1 (sold for $45 per unit) 250
e. Sale, July 3 (sold for $45 per unit) 350
f. Operating expenses (excluding income tax expense), $18,800

Required:

  1. 4. Prepare an income statement that shows under the FIFO method, LIFO method and weighted average method

Prepare an Income Statement that shows under the FIFO method, LIFO method and weighted average method.

ORION IRON CORP.
Income Statement
For the Year Ended December 31
FIFO LIFO Weighted Average
Sales Revenue $27,000 $27,000 $27,000
Cost of Goods Sold 6,700 7,200 6,960
Gross Profit 20,300 19,800 20,040
Operating Expenses 18,800 18,800 18,800
1,500 1,000 1,240
Income from operations

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