Question

Hemming Co. reported the following current-year purchases and sales for its only product. Units Acquired at Cost 245 units @ $11.80 - $ 2,891 Units Sold at Retail 190 units @ $41.80 390 units @ $16.80 - 6,552 Date Activities Jan. 1 Beginning inventory Jan. 10 Sales Mar.14 Purchase 2.15 Sales ly 30 Purchase Oct. 5 Sales Oct.26 Purchase Totals 350 units @ $41.80 445 units @ $21.80 - 9,701 430 units @ $41.80 145 units @ $26.80 - 1,225 units 3,886 $23,030 970 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

Answer 1

In FIFO table L4 value is 2891.

F G H I J K A B C D E 1 Perpetual FIFO: 2 Goods purchased 3 Date # of units Cost per unit# of units sold 4 Jan-01 Cost of goods sold cost per unit Cost of goods sold |# of units 245@ Det Inventory Balance Cost per unit Inventory balance 11.8 2691 5 6 Jan-10 190@ 11.8 224255 @ 11.8 649 8 Mar-141 390 @ 16.8 9 55 @ 3901 @ 11.8 16.8 6491 6552 7201 Mar-15 55 @ 295 @ 11.8 16.8 649 4956 5605 @ 95 @ 11.8 16.8 1596 15961 10 11 12 13 14 15 16 17 18 19 20 21 Jul-30 445 @ 21.8 @ 95 @ 445 @ 11.8 16.8 21.8 1596 9701 11297 Oct-05) @ 22 95 @ 335 @ 11.8 16.8 21.5 1596) 7303 8899 11.8 16.80 21.8 110 @ 2398 2398 145 @ 26.8 @ 23 24 25 26 Oct-26 27 28 29 30 Totals 11.8 16.8 21.8 26.8 1101 @ 145@ 2398 3886 6284 16746

K L 1 2 3 4 A B C D F G H J Perpetual LIFO: Goods purchased Cost of goods sold Date # of units Cost per unit # of units sold | Cost per unit Cost of goods sold |# of units Jan-01 245@ Inventory Balance Cost per unit Inventory balance 11.81 2891 5 6 Jan-10 1901 @ 11.8 55 @ 11.8 649 7 8 Mar-143901 @ 16.8 55 @ 11.8 9 390 @ 649 6552 7201 Mar-15 @ 350@ 11.8 16.8 55 @ 4 0 @ 11.8 16.8 5880 5880 6491 672 1321 10 11 12 13 14 15 16 17 18 19 20 21 Jul-30 445 @ 21.8 55 @ 40 @ 445@ 11.8 16.8 21.8 649 672 9701) 11022 Oct-05 11.8 16.8 21.5 55 @ 40 @ 15 @ 11.8 16.8 21.8 649 6721 327 1648 430 @ 9374 9374 145 @ 26.81 25 26 Oct-26 27 28 29 30 Totals 55 @ 40 @ 15 @ 145 @ 11.81 16.8 21.8 26.8 6491 672 3271 3886 55341 17496)

3) Sales revenue (970*41.8) Less: Cost of goods cold Gross maegin FIFO LIFO 40546 40546 16746 17496 23800 23050