Reference no: EM132699029

Question - 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 hand-21,000 units; cost $12.30 each.

Feb. 12 Purchased 71,000 units for $12.60 each.

Apr. 30 Sold 50,000 units for $20.10 each.

Jul. 22 Purchased 51,000 units for $12.90 each.

Sep. 9 Sold 71,000 units for $20.10 each.

Nov. 17 Purchased 41,000 units for $13.30 each.

Dec. 31 Inventory on hand-63,000 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 $11.80).

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.