Inventory Cost Project - LIFO Intermediate Accounting I Fall 2022 Page 1 of 1 REW Works has hired you to manage the cost of its inventory. It sells 2 types of tires. The General Tire that sells for $80 per tire and the Premium Tire that sells for $250 per tire. All sales are for cash EXCEPT where noted. It uses a perpetual inventory system and its inventory is valued using LIFO. Assume that units sold during the week included units that were received during the week. Requirements: 1. Based on the transactions below, determine the cost that should be charged to the Cost Of Goods Sold (COGS) account for each week of sales (10/14, 10/21 and 10/28). Please show you calculations. 2. Based on the transactions below, calculate the amount that is paid to Wonder Tire and Simple Tire for each individual payment. Please list the dates of the of the payments. 3. Calculate the cost of the ending inventory as of October 31. Oct-03 REW orders 40 Premium tires from Wonder Tire. The cost is $125.00 per tire for a total cost of $5,000. Wonder's terms are 1/10, net/30, FOB shipping point. Oct-03 REW orders 80 General tires from Simple Tires. The cost is $40.00 per tire for a total cost of $3,200. Simple's terms are 1/10, net/30, FOB destination. Oct-05 REW receives 30 Premium tires from Wonder Tire. The remaining tires are backordered and will be shipped when ready. The invoice is for the 30 tires received totaling $3,750. Oct-05 The responsible party receives and pays the $150 shipping invoice for the 30 Premium tires from Wee Ship Shippers. Oct-06 REW receives the 80 General tires from Simple Tires. The Invoice is for $3,200. Oct-06 The responsible party receives and pays the $240 shipping invoice for the 80 Premium tires from Wee Ship Shippers. Oct-14 During the week, REW sells 24 Premium tires and 50 General tires for cash. Oct-14 REW receives the 10 Premium tires from Wonder Tire that had been on backorder. The invoice is for the 10 tires for a total of $1,250. Oct-14 The responsible party receives and pays the $50 shipping invoice for the 10 Premium tires from Wee Ship Shippers. Oct-14 REW orders 30 Premium Tires from Wonder Tire. The cost is now $130.00 per tire for a total cost of $3,900. Wonder's terms are 1/10, net/30, FOB shipping point. Oct-14 REW orders 50 General tires from Simple Tires. The cost is $42.00 per tire for a total cost of $2,100. Simple's terms are 1/10, net/30, FOB destination. Oct-17 REW pays the amount outstanding to Wonder Tire. Oct-17 REW pays the amount outstanding to Simple Tires. Oct-19 REW receives the 30 Premium tires from Wonder Tire and the invoice for $3,900. Oct-19 The responsible party receives and pays the $180 shipping invoice for the 30 Premium tires from Wee Ship Shippers. Oct-20 REW receives the 50 General tires from Simple Tires. The Invoice is for $2,100. Oct-20 The responsible party receives and pays the $200 shipping invoice for the 50 Premium tires from Wee Ship Shippers. Oct-21 During the week, REW sells 26 Premium tires and 60 General tires for cash. Oct-21 REW orders 20 Premium Tires from Wonder Tire. The cost is now $140.00 per tire for a total cost of $2,800. Wonder's terms are 1/10, net/30, FOB shipping point. Oct-21 REW orders 40 General tires from Simple Tires. The cost is $45.00 per tire for a total cost of $1,800. Simple's terms are 1/10, net/30, FOB destination. Oct-24 REW pays the amount outstanding to Wonder Tire. Oct-24 REW pays the amount outstanding to Simple Tires. Oct-25 REW receives the 20 Premium tires from Wonder Tire and the invoice for $2,800. Oct-25 The responsible party receives and pays the $160 shipping invoice for the 20 Premium tires from Wee Ship Shippers. Oct-26 REW receives the 40 General tires from Simple Tires. The Invoice is for $1,800. Oct-26 The responsible party receives and pays the $200 shipping invoice for the 50 Premium tires from Wee Ship Shippers. Oct-28 During the week, REW sells 20 Premium tires to Levy Company for $275 each on account. Terms of the sale to Levy are 2/10 N/30, FOB shipping point. REW also sold an additional 20 Premium tires at the regular price for cash. In addition, REW sold 50 General tires for cash. Oct-28 REW orders 40 Premium Tires from Wonder Tire. The cost is $125.00 per tire for a total cost of $5,000. Wonder's terms are 1/10, net/30, FOB shipping point. Oct-28 REW orders 80 General tires from Simple Tires. The cost is $40.00 per tire for a total cost of $3,200. Simple's terms are 1/10, net/30, FOB destination. Oct-31 REW pays the amount outstanding to Wonder Tire. Oct-31 REW pays the amount outstanding to Simple Tires. Answers to Requirements: Requirement 1: Cost of Goods Sold 10/14 Cost of Goods Sold 10/21 Cost of Goods Sold 10/28 Requirement 2: Payment to Wonder Tire 10/17 Payment to Simple Tire 10/17 Payment to Wonder Tire 10/24 Payment to Simple Tire 10/24 Payment to Wonder Tire 10/31 Payment to Simple Tire 10/31 Requirement 3: Ending Inventory 10/31