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.