In: Accounting
Hemming Co. reported the following current-year purchases and sales
for its only product.
Date |
Activities |
Units Acquired at Cost |
Units Sold at Retail |
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Jan. |
1 |
Beginning inventory |
200 |
units |
@ $10 |
= |
$ |
2,000 |
||||||||
Jan. |
10 |
Sales |
150 |
units |
@ $40 |
|||||||||||
Mar. |
14 |
Purchase |
350 |
units |
@ $15 |
= |
5,250 |
|||||||||
Mar. |
15 |
Sales |
300 |
units |
@ $40 |
|||||||||||
July |
30 |
Purchase |
450 |
units |
@ $20 |
= |
9,000 |
|||||||||
Oct. |
5 |
Sales |
430 |
units |
@ $40 |
|||||||||||
Oct. |
26 |
Purchase |
100 |
units |
@ $25 |
= |
2,500 |
|||||||||
Totals |
1,100 |
units |
$ |
18,750 |
880 |
units |
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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.