Question

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

210

units

@ $10.40

=

$

2,184

Jan.

10

Sales

170

units

@ $40.40

Mar.

14

Purchase

310

units

@ $15.40

=

4,774

Mar.

15

Sales

270

units

@ $40.40

July

30

Purchase

410

units

@ $20.40

=

8,364

Oct.

5

Sales

380

units

@ $40.40

Oct.

26

Purchase

110

units

@ $25.40

=

2,794

Totals

1,040

units

$

18,116

820

units

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

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 1 210 @ $10.40 = $2,184.00 January 10 170 @ $10.40 = $1,768.00 40 @ $10.40 = $416.00 March 14 310 @ $15.40 40 @ $10.40 = $416.00 310 @ $15.40 = 4,774.00 $5,190.00 March 15 40 @ $10.40 = $416.00 40 @ $10.40 = $416.00 230 @ $15.40 = 3,542.00 80 @ $15.40 = $1,232.00 $3,958.00 $1,648.00 July 30 410 @ $20.40 40 @ $10.40 = $416.00 80 @ $15.40 = 1,232.00 410 @ $20.40 = 8,364.00 $10,012.00 October 5 40 @ $10.40 = $416.00 40 @ $10.40 = $416.00 80 @ $15.40 = 1,232.00 80 @ $15.40 = 1,232.00 300 @ $20.40 = 6,120.00 110 @ $20.40 = 2,244.00 $7,768.00 $3,892.00 October 26 110 @ $25.40 40 @ $10.40 = $416.00 80 @ $15.40 = 1,232.00 110 @ $20.40 = 2,244.00

Answer 1