Business, 20.06.2020 21:57 21hendlill

During the year, TRC Corporation has the following inventory transactions. Date Transaction Number of Units Unit Cost Total Cost Jan. 1 Beginning inventory 44 $ 36 $ 1,584 Apr. 7 Purchase 124 38 4,712 Jul. 16 Purchase 194 41 7,954 Oct. 6 Purchase 104 42 4,368 466 $ 18,618 For the entire year, the company sells 413 units of inventory for $54 each. Required: 1. Using FIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.

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Answer from: steve12335

TRC Corporation

Calculations, using FIFO:

a) Ending Inventory:

Ending Inventory in units = Units available for sale minus Units sold

Ending Inventory in units = 466 - 413 = 53 units

Ending Inventory value = Units x FIFO cost of last purchase = 53 x $42 = $2,226

b) Cost of goods sold:

Cost of goods sold = Beginning Inventory + Purchases - Ending Inventory

Cost of goods sold = $1,584 + 17,034 - 2,226 = $16,392

c) Sales Revenue:

Sales Revenue = Units sold x Selling price = 414 x $54 = $22,302

d) Gross Profit:

Gross Profit = Sales Revenue minus Cost of goods sold

Gross Profit = $22,302 - $16,392 = $5,910

Explanation:

a) Summary of Inventory Transactions:

Date Transaction Number of Units Unit Cost Total Cost

Jan. 1 Beginning inventory 44 $ 36 $ 1,584

Apr. 7 Purchase 124 38 4,712

Jul. 16 Purchase 194 41 7,954

Oct. 6 Purchase 104 42 4,368

b) Cost of goods available 466 $ 18,618

c) Sales 413 $ 54 $ 22,302

d) Dec. 31 Ending Inventory 53 42 $ 2,226

e) The FIFO (First-in, First-out) inventory method assumes that goods sold are from earlier inventory units, unlike Last-in, First-out (LIFO). This means that beginning and earlier purchased inventory units are sold first before the latest purchases. Using the FIFO method, the ending inventory is valued at the cost of the most recent inventory purchases.

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Answer from: Quest

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During the year, TRC Corporation has the following inventory transactions. Date Transaction Number o...