Question

Hemming Co. reported the Tollowing current-year purchases and Sales Top Its Ohly product. Units Sold at Retail Units Acquired at Cost 215 units @ $10.60 = $2,279 180 units @ $40.60 320 units @ $15.60 = 4,992 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 260 units @ $40.60 415 units @ $20.60 = 8,549 400 units @ $40.60 @ $25.60 = 115 units 1,065 units 2,944 $18,764 840 units Award: 2.00 points 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: Goods Purchased # of Cost per units unit Cost of Goods Sold # of units Cost per Cost of Goods sold unit Sold Date Inventory Balance # of units Cost per Inventory unit Balance 215 @ $ 10.60 = $ 2,279.00 January 1 January 10 March 14 March 15 July 30

Answer 1

Correct Answer:

Perpetual	FIFO	LIFO
Cost of Goods Sold	$      7,271.00	$              14,204.00
Ending Inventory	$      5,210.00	$                3,315.00

Working:

Perpetual FIFO
Date	Goods Purchased			Cost of Goods Sold			Inventory Balance
	# of Units	Cost Per Unit	Cost of Goods Available for sale	# of Units Sold	Cost per Unit	Cost of Goods Sold	# of Units	Cost per Unit	Inventory Balance
01-Jan							215	$        10.60	$       2,279.00
10-Jan				180	$    10.60	$      1,908.00	35	$        10.60	$          371.00
14-Mar	320	$          15.60	$         4,992.00				35	$        10.60	$          371.00
							320	$        15.60	$       4,992.00
15-Mar				35	$    10.60	$          371.00	95	$        15.60	$       1,482.00
				225	$    15.60	$      3,510.00
30-Jul	415	$          20.60	$         8,549.00				95	$        15.60	$       1,482.00
							415	$        20.60	$       8,549.00
05-Oct				95	$    15.60	$      1,482.00	110	$        20.60	$       2,266.00
				305	$    20.60	$      6,283.00
26-Oct	115	$          25.60	$         2,944.00				110	$        20.60	$       2,266.00
							115	$        25.60	$       2,944.00
Totals				840	$    26.20	$      7,271.00	225		$       5,210.00

Perpetual LIFO
Date	Goods Purchased			Cost of Goods Sold			Inventory Balance
	# of Units	Cost Per Unit	Cost of Goods Available for sale	# of Units Sold	Cost per Unit	Cost of Goods Sold	# of Units	Cost per Unit	Inventory Balance
01-Jan							215	$        10.60	$       2,279.00
10-Jan				180	$    10.60	$      1,908.00	35	$        10.60	$          371.00
									$                    -
14-Mar	320	$          15.60	$         4,992.00				35	$        10.60	$          371.00
							320	$        15.60	$       4,992.00
									$                    -
15-Mar				260	$    15.60	$      4,056.00	35	$       10.60	$          371.00
							60	$        15.60	$          936.00
30-Jul	415	$          20.60	$         8,549.00				35	$        10.60	$          371.00
							60	$        15.60	$          936.00
							415	$        20.60	$       8,549.00
05-Oct				400	$    20.60	$      8,240.00	35	$        10.60	$          371.00
						$                   -	60	$        15.60	$          936.00
							15	$        20.60	$          309.00
26-Oct	115	$          25.60	$         2,944.00				35	$        10.60	$          371.00
							60	$        15.60	$          936.00
							15	$        20.60	$          309.00
							115	$        25.60	$       2,944.00
Totals				840	$    15.60	$    14,204.00	225		$       3,315.00

Requirement 3:

	FIFO	LIFO
Gross Margin	$          26,833	$        19,900

working:

	FIFO	LIFO
Sales Revenue	$          34,104	$        34,104
Less: Cost of Goods sold	$            7,271	$        14,204
Gross Margin	$          26,833	$        19,900

Specific Identifications
Date	Goods Available for sale			Cost of Goods Sold			Ending Inventory Balance
	# of Units	Cost Per Unit	Cost of Goods Available for sale	# of Units Sold	Cost per Unit	Cost of Goods Sold	# of Units	Cost per Unit	Inventory Balance
Beginning Inventory	215	$          10.60	$         2,279.00	215	$    10.60	$      2,279.00	0	$        10.60	$                    -
Purchases
14-Mar	320	$ 15.6	$         4,992.00	280	$    15.60	$      4,368.00	40	$        15.60	$          624.00
30-Jul	415	$          20.60	$         8,549.00	345	$    20.60	$      7,107.00	70	$        20.60	$       1,442.00
26-Oct	115	$          25.60	$         2,944.00	0	$    25.60	$                   -	115	$        25.60	$       2,944.00
Totals	1065		$       18,764.00	840		$    13,754.00	225		$       5,010.00

End of answer.

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