Question
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
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: Jan. 1 Inventory on hand21,000 units; cost $13.20 each. Feb. 12 Purchased 71,000 units for $13.50 each. Apr. 30 Sold 50,000 units for $21.00 each. Jul. 22 Purchased 51,000 units for $13.80 each. Sep. 9 Sold 71,000 units for $21.00 each. Nov. 17 Purchased 41,000 units for $14.20 each. Dec. 31 Inventory on hand63,000 units. 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. (Assume beginning inventory under LIFO was 21,000 units with a cost of $12.70). 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 $11,000.
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