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 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 Required 1Required 2 Required 3 Determine the costs assigned to ending inventory and to cost of goods sold using FIFO Per has ost of Goods # of units 1 unit Sold #of units | # of units sold | Cost per unit Cost per Inventory Balance Cost per Date unit January1 January 10 March 14 20010.002,000.00 10.00 10.00 15.00 150| @ S 40.00 | $6,000.00 35015.00 March 15 $ 10.00! July 30 450| @ S 20.00 10.00 20.00 October 5 October 26 10025.00 25.00 Totals 5 6,000.00

Explanation / Answer

1. Costs assigned to ending inventory and to cost of goods sold using FIFO is:

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

3. Gross margin for FIFO method and LIFO method.

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-01 200 10 2,000 Jan-10 150 10 1,500 50 10 500 Mar-14 350 15 5,250 50 10 500 350 15 5,250 Mar-15 50 10 500 250 15 3,750 100 15 1,500 Jul-30 450 20 9,000 100 15 1,500 450 20 9,000 Oct-05 100 15 1,500 120 20 2,400 330 20 6,600 Oct-26 100 25 2,500 120 20 2,400 100 25 2,500 880 13,850 220 4,900

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