Required information [The following information applies to the questions display

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Required information

[The following information applies to the questions displayed below.]
  
Hemming Co. reported the following current-year purchases and sales for its only product.
    

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.

Date Activities Units Acquired at Cost Units Sold at Retail Jan. 1 Beginning inventory 300 units @ $14.00 = $ 4,200 Jan. 10 Sales 250 units @ $44.00 Mar. 14 Purchase 520 units @ $19.00 = 9,880 Mar. 15 Sales 460 units @ $44.00 July 30 Purchase 500 units @ $24.00 = 12,000 Oct. 5 Sales 480 units @ $44.00 Oct. 26 Purchase 200 units @ $29.00 = 5,800 Totals 1,520 units $ 31,880 1,190 units 2 Required information [The following information applles to the questions displayed belowj Hemming Co. reported the following current-year purchases and sales for its only product. 10 points Date Jan. 1 Beginning inventory Tan.10 Sales Mar. 14 Purchase Mar. 15 Sales July30 Purchase Oct. 5 Sales Oct.26 Purchase Activities Units Sold at Retail 250 units 44.00 460 units $44.00 480 units $44.00 Units Acquired at Cost 300 unite $14.00- $4,200 520 units $19.00 9,880 500 units $24.0012,000 200 units $29.00 5,800 eBook Print Totals 1,520 units $31,880 1,190 units References 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. Perpetual FIFO

2. Perpetual: LIFO

3 Gross Margin FIFO and 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 1-Jan 300 @ $14 $4,200 10-Jan 250 $14 $3,500 50 @ $14 $700 14-Mar 520 $19 50 $14 $700 520 $19 $9,880 15-Mar 50 $14 $700 110 $19 $2,090 410 $19 $7,790 30-Jul 500 $24 110 $19 $2,090 500 $24 $12,000 5-Oct 110 $19 $2,090 130 $24 $3,120 370 $24 $8,880 26-Oct 200 $29 130 $24 $3,120 200 $29 $5,800 Totals $22,960 $8,920

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