2.

3. Which method resulted in a higher profitability when inventory costs are rising?

Exercise 6-4A Calculate inventory amounts when costs are rising (L06-3) During the year, TRC Corporation has the following inventory transactions. $ Date Transaction Jan. 1 Beginning inventory Apr. 7 Purchase Jul. 16 Purchase Oct. 6 Purchase Number of Units Unit Cost 60 $ 52 140 54 210 57 120 58 $ 530 Total Cost 3,120 7,560 11,970 6,960 29,610 $ For the entire year, the company sells 450 units of inventory for $70 each. Required: 1. Using FIFO, calculate (a) ending inventory, (b) cost of goods sold, (c) sales revenue, and (d) gross profit. 2. Using LIFO, calculate (a) ending inventory, (b) cost of goods sold, (c) sales revenue, and (d) gross profit. 3. Using weighted average cost, calculate (a) ending inventory, (b) cost of goods sold, (c) sales revenue, and (d) gross profit. 4. Determine which method will result in higher profitability when inventory costs are rising. Required 2: LIFO Cost of Goods Available for Sale Cost of Goods Sold Cost of goods available for sale # of units Cost per Ending Inventory Ending # of units unit inventory Cost of goods sold # of units Cost per unit Cost per unit 60 $ 52 54 Beginning Inventory Purchases: Apr. 7 Jul. 16 Oct. 6 Total 57 140 210 120 530 58 Sales revenue Gross profit Required 3: Weighted Average Cost Cost of Goods Available for Sale Cost of Goods Sold Ending Inventory # of units in Cost per Ending ending unit inventory inventory Cost of goods Cost per unit available for sale 60 $ 52 # of units Cost per unit sold Cost of goods sold # of units 54 Beginning Inventory Purchases: Apr. 7 Jul. 16 Oct. 6 Total 57 140 210 120 530 58 Weighted average cost per unit: Sales revenue Gross profit