Question

In: Accounting

Hemming Co. reported the following current-year purchases and sales for its only product.    Date Activities...

Hemming Co. reported the following current-year purchases and sales for its only product.

  

Date Activities Units Acquired at Cost Units Sold at Retail
Jan. 1 Beginning inventory 125 units @ $11.00 = $ 1,375
Jan. 10 Sales 115 units @ $41.00
Mar. 14 Purchase 275 units @ $16.00 = 4,400
Mar. 15 Sales 165 units @ $41.00
July 30 Purchase 425 units @ $21.00 = 8,925
Oct. 5 Sales 275 units @ $41.00
Oct. 26 Purchase 625 units @ $26.00 = 16,250
Totals 1,450 units $ 30,950 555 units

  
Required:

Hemming uses a perpetual inventory system. (Round cost per unit to 2 decimal places.)

   

(a) Determine the costs assigned to ending inventory and to cost of goods sold using FIFO.

(b) Determine the costs assigned to ending inventory and to cost of goods sold using LIFO.

(c) Compute the gross margin for each method.

a) Perpetual FIFO:
Goods Purchased Cost of Goods Sold Inventory Balance
Date # of units Cost per unit # of units sold Cost per unit Cost of Goods Sold # of units Cost per unit Inventory Balance
January 1
January 10
March 14
March 15
July 30
October 5
October 26
=
Totals

*Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.

a) Perpetual LIFO:
Goods Purchased Cost of Goods Sold Inventory Balance
Date # of units Cost per unit # of units sold Cost per unit Cost of Goods Sold # of units Cost per unit Inventory Balance
January 1
January 10
March 14
March 15
July 30
October 5
October 26
=
Totals

*Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.

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