Question

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

Jan. 1 Beginning inventory 205 units @ $10.20 = $ 2,091 (Units Acquired at Cost)

Jan. 10 Sales 160 units @ $40.20 (Units sold at Retail)

Mar. 14 Purchase 300 units @ $15.20 = 4,560 (Units Acquired at Cost)

Mar. 15 Sales 250 units @ $40.20 (Units sold at Retail)

July 30 Purchase 400 units @ $20.20 = 8,080 (Units Acquired at Cost)

Oct. 5 Sales 375 units @ $40.20 (Unites sold at Retail)

Oct. 26 Purchase 105 units @ $25.20 = 2,646 (Units Acquired at Cost)

Totals: 1,010 units acquired at cost, $17,377, 785 units sold at retail

(Required: Hemming uses a perpetual inventory system.)

1. Determine the costs assigned to ending inventory and to cost of goods sold using FIFO.

2. Determine the costs assigned to ending inventory and to cost of goods sold using LIFO.

3. Compute the gross margin for FIFO method and LIFO method.

Answer 1