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.

Answer:

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

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