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. Units Sold at Retail Units Acquired at Cost 295 units @ $13.80 = $ 4,071 240 units @ $43.80 480 units @ $18.80 - 9,024 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 420 units @ $43.80 495 units @ $23.80 = 11,781 465 units @ $43.80 195 units @ $28.80 - 1,465 units 5,616 $30,492 1,125 units Exercise 5-8 Specific identification LO P1 Required: Hemming uses a periodic inventory system. Assume that ending inventory is consists of 60 units from the March 14 purchase, 85 units from the July 30 purchase, and all 195 units from the October 26 purchase. Using the specific identification method, calculate the (a) the cost of goods sold and (b) the gross profit.

Answer 1

Solution: Specific Identification Available for Sale Cost of Goods Sold Ending Inventory Purchase Date Activity Units Unit Cost Units Sold Unit Cost COGS Ending Inventory-Units Cost PerUnit Ending Inventory-Cost b=a-c Jan 1. Beginning inventory 295 13.8 295 13.8) 4071 13.8 Mar 14. Purchase 480 18.8 420 18.8 7896 18.8 1128 Jul 30. Purchase 495 410 23.8 9758 85 23.8 2023 Oct 26. Purchase 195 28.8 28.8 0 28.8 5616 1465 21725 8767 23.8 1125 sales =970*41.8 Less: COGS Gross profit Spec.ID 49275 21725 27550