Question

Hemming Co. reported the following current-year purchases and sales for its only product Units Acquired at Cost 265 units $12.60 3,339 Units Sold at Retail Activities Date Jan. 1 Beginning inventory 225 units $42.60 Jan.10 Sales Mar.14 Purchase 430 units $17.60 7,568 370 units $42.60 Mar.15 Sales July 30 Purchase Oct. 5 Sales Oct.26 Purchase 465 units$22.60 10,509 440 units $42.60 165 units $27.60 4,554 1,325 units $25,970 1,035 units Totals Exercise 6-8 Specific identification LO P1 Required: Hemming uses a perpetual inventory system. Assume that ending inventory is made up of 55 units from the March 14 purchase, 70 units from the July 30 purchase, and all 165 units from the October 26 purchase. Using the specific identification method, calculate the following a) Cost of Goods Sold using Specific Identification Available for Sale Cost of Goods Sold Ending Inventory Ending Inventory Unit Cost Units Ending Inventory Cost Unit Units Sold Date Activity Units Unit Cost COGS Cost Beginning Inventory Jan. 1 265 0.00$ 0 0.00 $ 0 Mar. 14 Purchase 430 0.00 0.00 July 30 Purchase 465 0.00 0.00 0 Purchase Oct. 20 165 0.00 0 0.00 0 1,325 0 0 0 Dreut on

Answer 1

date D E F G Н K L 1 a) cost of goods sold using specific identification 2 ending inventory available for sale cost of goods sold ending inventor unit cost inventory ending units date unit cost activity units unit cost COGS sold 4 cost y units beginning inventory purchase purchase $12.60 $17.60 $22.60 $12.60 $3,339 $12.60 $17.60 $22.60 $0 5 01-Jan 265 265 0 $17.60 $6,600 $8,927 $0 $968 6 14-Mar 430 375 55 $2.60 $1,582 30-Jul 395 465 70 $27.60 $27.60 $27.60 $4,554 26-Oct purchase 165 0 165 $18,866 $7,104 1,325 1,035 290 10 b) gross margin using specific identification $44,091 11 sales revenue 12 $18,866 less: cost of goods sold 13 gross margin $25,225 equals: 14 15 84 st co a

for formulas and calculations, refer to the image below -

date В4 В A C D Е G Н I K L a) cost of goods sold using specific identification 2 ending inventory available for sale cost of goods sold 3 ending inventory units unit cost ending inventory cost date units sold activity units unit cost unit cost COGS 4 beginning inventory 265 =F5*G5 0 -D5-15 =15*J5 43466 12.6 -E5 -E5 5 -F6*G6 E 16*J6 43538 purchase 430 465 17.6 =D6-16 -E6 55 -E6 6 43676 E17*J7 purchase purchase 22.6 27.6 -E7 F7*G7 70 -E7 7 -D7-17 43764 -E8 18* J8 165 -E8 -F8*G8 165 8 ED8-18 -SUM(D5:D8) =SUM(H5:H8) SUM(15:18) -SUM(F5:F8) -SUM(K5:K8) 9 10 b) gross margin using specific identification sales revenue 11 - 1035 *42.6 12 cost of goods soldH9 less: 13 14 equals: gross margin D12-D13 15

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