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Hemming Co. reported the following current-year purchases and sales for its only product.
    

Date

Activities

Units Acquired at Cost

Units Sold at Retail

Jan.

1

Beginning inventory

255

units

@ $12.20

=

$

3,111

Jan.

10

Sales

210

units

@ $42.20

Mar.

14

Purchase

410

units

@ $17.20

=

7,052

Mar.

15

Sales

350

units

@ $42.20

July

30

Purchase

455

units

@ $22.20

=

10,101

Oct.

5

Sales

430

units

@ $42.20

Oct.

26

Purchase

155

units

@ $27.20

=

4,216

Totals

1,275

units

$

24,480

990

units

Compute the gross margin for FIFO method and LIFO method.

	FIFO: LIFO: Sales revenue Less: Cost of goods sold Gross margin

Answer 1

LIFO and FIFO Method are used in calculation of Cost of Goods Sold.

FIFO - First In First Out, which means oldest goods in the inventory will be sold first.

LIFO - Last In First Out, which means Latest purchased goods in the inventory will be sold first.

poss margin As per Sales Revenue (Notel) Cost of Good Sold CNote 2) FIFO method. 41778 17378 less 24,40 Gross margin Notel Sales Revenue. 6th Jan 2lounits @ 42.20 5th Mar 35o units @ 42- 20 sth oct 430 units @ 42.20 8862 14770 18146 41.778 Note 2 Cost of Cost of Goods Goods sold. Sold Beginning at Purchase - Inventory = 3111 + 21369 - 7102 = 17.378 - Closing Invention Beginning Inventory = 255 units @ 12.20 - 3111 Purchase 14th Mar 410unitsal 7.20 30th July uss units@22-20 26th oct 18 unitsa 27.20 Shot on OnePlus By Lehar Jain 7052 10101 4216 21369

classmate Date Page Closing Inventory O doo Opening 255 - Sales Pithyan) 210 + Purchase (lith Man) 410 - Sales (15th Mar) 350 455 Cor(Purch of 14th mar) Balance 105 (Purch of 14th Mar) + Purchase (30th July) 455 u o 560 torchurch of 14th mar) 1-sales (sthoct) 430 C32 (Purch of 3th July ) Balance 130 (Purch of 30th July) a Purchase (26th Oct 155 -tos Church of 14th mar) Closing Inventory 3 Bounits @ 30th July @ 22:29 issunits @ 26th oct. @ 27.20 2886 4216 7102 Shot on OnePlus By Lehar Jain

classmate Date Page Gross Margin as per LIFO Method Sales Revenue (Note 1) 41778 lesso Cost of Goods Sold. 18088 - Grow Marain Gross Margen o us (23690 but Note 1 Sales Revenue 10th Jan 210 units @ 42.20 (5th Mar 3sounits @ 42.20 sthoct 4Bounite @ 42. 20 8862 14770 1814 41778 Note 2 Cost of Goods Sold Cost of goods Sold Opening & Purchase - Closing Inventory Inventory 3111 +021369-6392 18087 Opening Inventory = 258 units @ 12.20 = 311 Purchase 14th mar. 30th July 26th oct Glounits @ 17.20 los units @ 2220 issunits @ 27.20 of 7052 lolol (4216 21369 DA Shot on OnePlus By Lehar Jain

Date Page Closing Inventory Openingitus 255 to E) Sales Cloth Jan) 210 45 + Purchase (4th Mar) 410 - Total. 455. 0 - Sales Cisth May) 350 Cunits out of Purchase on 14th Mar) to Balance usunits (op) los + Purchase (36th July) 65 bounits of Purch of 1 with Mar - Tatals 560 -sales (sthoct) 430 Balance 130 (out of Purch on 30th July) sanit Cop) sono Geunits of Purch o/14th March A Purchase (26thout) 155 Sunits of Purch on 30th Inly Closing Inventory 285 founds | पड opening Inventory @ 12.20 549 & 0 ) 1 Ho प र्माने। Purch on 17.20 1032 Duck alw Tuy BLines Purch on @ 22.00 555 -Sunts Purchof 28th Oct @27.20 T 46 9216 - + = 6352 0A_Shot on OnePlus By Lehar Jain