Question

MHE Reader xercises Saved Help Save & Exit Check Required information [The following information applies to the questions displayed below.) Hemming Co. reported the following current-year purchases and sales for its only product. Units Acquired at Cost 230 units @ $11.20 - $ 2,576 Units Sold at Retail 160 units @ $41.29 350 units @ $16.20 - 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 5,670 9,116 430 units @ $21.20 - 130 units @ $26.20 - 1,140 units 320 units @ $41.20 400 units @ $41.20 3,406 $20,768 880 units 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. < Prev 34 of 5 Next >

Answer 1

Goods Purchased #of Units Cost per unit # of Units sold Cost of Goods Sold Cost per unit FIFO Date Jan, 1 Jan, 10 Cost of goods sold # of Units 230 @ $ 1,792 70 @ 160 @ $ 11.20 = Inventory Balance Cost per unit Inventory balance $ 11.20 = 2,576 $ 11.20 = 784 $ 11.20 784 I $ 16.20 5,670 6,454 70 @ Mar, 14 350 @ $ 16.20 350 420 70 @ Mar, 15 Mar, 15 $ $ 11.20 16.20 = 784 4,050 100 @ 100 l@ @ $ 430 @ Jul, 30 $ 16.20 21.20 21.20 1,620 1,620 9,116 10,736 $ = Oct, 5 Oct, 5 100 @ 300 @ $ $ 16.20 21.20 1,620 = = 16.20 21.20 6,360 @ $ 130 130 130 130 260 $ $ 21.20 = 26.20 = 2,756 2,756 2,756 3,406 6,162 @ @ Oct, 26 130 @ $ 26.20 14,606

Goods Purchased # of Units Cost per unit # of Units sold Cost of Goods Sold Cost per unit Cost of goods sold # of Units LIFO Date Jan, 1 Jan, 10 160 @ $ 11.20 = $ 1,792 Mar, 14 350 @ $ 16.20 70 @ Mar, 15 320 @ $ 16.20 = $ 5,184 Inventory Balance Cost per unit Inventory balance $ 11.20 2,576 $ 11.20 784 11.20 784 16.20 5,670 6,454 $ 11.20 784 $ 16.20 486 1,270 IS 11.20 784 $ 16.20 486 21.20 9,116 10,386 11.20 784 16.20 486 21.20 636 11.20 784 486 21.20 636 26.20 3,406 Jul, 30 430 @ $ 21.20 uu Oct, 5 400 @ $ 21.20 = $ 8,480 16.20 Oct, 26 130 @ $ $ 26.20 880 15,456 260 5,312

$ Sales Revenue Less: Cost of goods sold Gross margin FIFO 36,256 14,606 21,650 LIFO 36,256 (880 units * $ 41.20) 15,456 20,800 $ $ $ $ $