Two (Chapters 5,6,8 & 9) 6 (The following information applies to the questions d

Question

Two (Chapters 5,6,8 & 9) 6 (The following information applies to the questions displayed below.) Hemming Co.reported thie following current-year purchases and sales for its only product Jan. 1 Beginning inventory Jan. 10 Sales Mar.14 Purchase Mar. 15 Sales July 30 Purchase Oct. 5 Sales Oct. 26 Purchase 225 units $11.00$2,475 340 units $16.00 5,440 425 units @ $21.00 = 8,925 125 units $26.00 3,258 150 units $41.00 300 units $41.00 395 units$41.00 Totals 1,115 units es 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.

Explanation / Answer

1. Cost of goods sold and Ending inventory by FIFO is:

2. Cost of goods sold and Ending Inventory by LIFO is

3.

Gross Profit is:

FIFO-Perpetual Date Goods Purchased Cost of goods sold Ending Inventory Units @ Cost per unit Cost of purchase Units sold @ Cost per unit Cost of goods sold Units @ Cost per unit Ending balance Jan-01 225 11 2,475 Balance 225 2,475 Jan-10 150 11 1,650 75 11 825 Balance 75 825 Mar-14 340 16 5,440 75 11 825 340 16 5,440 Balance 415 6,265 Mar-15 75 11 825 225 16 3,600 115 16 1,840 Balance 115 1,840 Jul-30 425 21 8,925 115 16 1,840 425 21 8,925 Balance 540 10,765 Oct-05 115 16 1,840 145 21 3,045 280 21 5,880 Balance 145 3,045 Oct-26 125 26 3,250 145 21 3,045 125 26 3,250 890 17,615 845 13,795 270 6,295

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