Question

Required Information Use the following information for the Exercises below. [The following Information applies to the questions displayed below.] Hemming Co. reported the following current-year purchases and sales for its only product. Date Activities Jan. 1 Beginning inventory Jan. 10 Sales Mar. 14 Purchase Mar. 15 Sales July 30 Purchase Oct. 5 Sales Oct. 26 Purchase Totals Units Acquired at Cost Units Sold at Retail 200 units@ $10 = $ 2,800 150 units @ $40 350 units@ $15 = 5,250 300 units @ $40 450 units@ $20 = 9,800 430 units @ $40 100 units @ $25 = 2,589 1,100 units $18,750 880 units Exercise 5-7 Perpetual: Inventory costing methods-FIFO and LIFO LO P1 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. Complete this questions by entering your answers in the below tabs. Required 1 Required 2 Required 3 Determine the costs assigned to ending inventory and to cost of goods sold using FIFO. Perpetual FIFO:

Answer 1

Perpetual FIFO Goods Purchased Cost of maerchandise Sold Inventory Date # of units Cost per unit Goods purchased # of units sold Cost per Unit Cost of Goods sold # of units Cost per Unit Inventory Balance January 1 200 $ 10 $ 2,000 January. 10 150 $ 10 $ 1.500 50 $ 10 $ 500 March.14 350 S 15 $ 5,250 50 $ 10 $ 500 350 S 15 $ 5,250 March.151 50 $ 10 $ 500 100 $ 15 $ 1,500 250 $ 15 $ 3,750 July 301 4 50 $ 20 $ 9,000 100 $ 15 $ 1,500 450 $ 20 $ 9,000 October 5 100 $ 15 $ 1,500 120 $ 20 $ 2,400 330 $ 20 | 6,600 October. 26. 100 $ 25$ 2,500 120 $ 20 2,400 100 $ 25 2,500 Totals 13,850 2201 4,900

2 Perpetual LIFO Date January 1 January. 10 March.14 March.15 10 s 500 cols July 30 Goods Purchased Cost of maerchandise Sold Inventory # of units Cost per unit Goods purchased # of units sold Cost per Unit Cost of Goods sold # of units Cost per Unit Inventory Balance 200 $ 10 $ 2,000 150 $ 10 $ 1,500 50 $ 10 $ 500 350 S 15 $ 5,250 50 $ 10 $ 500 350 $ 15 5,250 300 $ 15 $ 4,500 50 $ 50 S 15 $ 750 450 $ 20 $ 9,000 50 $ 10 s 500 50 $ 15 $ 750 450 $ 9,000 430 $ 20 $ 8,600 50 $ 10 $ 500 50 $ 15 $ 750 201 $ 20 $ 400 100 $ 25 $ 2,500 50 $ 10 S 500 50 $ 15 $ 750 20 $ 20 $ 400 100 $ 25 $ 2,500 880 $ 14,600 2201 4,150 October 5 October. 26 Totals

Sales Revenue Less: cost of goods Sold Gross Margin FIFOLIFO $35,200 $ 35,200 $13,850 $ 14,600 $21,350 $ 20,600 Working Notes: Sales Revenue = 150*540 +300*540+430*$40 = $35,200