Question

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 300 units $14.00 4,200 520 units $19.009,880 500 units $24.00-12,000 00ite $29.00 -5,800 Jan.10 Sales Mar.15 Sales July30 Purchase Oct. 5 Sales 250 unite $44.00 460 units $44.00 480 units $44.00 Totals 1,520 units $31,880 1,190 units Hemming uses a perpetual inventory system. Assume that ending inventory is made up of 50 units from the March 14 purchase, 80 units from the July 30 purchase, and all 200 units from the October 26 purchase. Using the specific identification method, calculate the following. Ending Inventory Ending Units Unit Units Unit Cost COGS Inventory Unit Cost Inventory Units 0.00 S $ 0.00 S 000 S 0.00 0.00 s $ 0.00 s 0.00 0.00 520 uly 30 Purchase Oct. 26 Purchase 1,520 3 of 3 Net

Answer 1

Answer and Explanation:

Specific Identification Method Available for sale Cost of goods sold Ending Inventory Date Activity Unit- Unit Cost Quantity Unit-$Total $ Quantity Unit Total $ Beginning 300 14.00 520 19.00 500 24.00 200 $ 29.00 1520 300 $ 14.00 4,200 01-Jan inventory 14-Mar Purchase5 30-Jul Purchase 26-Oct Purchase 19.00 950 80 24.00 1,920 200 $ 29.00 5,800 8,670 470 S 19.00 S 8,9305 420 $ 24.00 $10,080 1190 $23,210 330 Under this method, each item sold and each item remaining in the inventory is identified. The cost of specific items that are sold during a period is included in the cost of goods sold for that period and the cost of specific items remaining on hand at the end of a period is included in the ending inventory of that period Here, the question has mentioned the remaining inventory out of the purchases. There is no remaining inventory out of the beginning inventory, hence all those units have been sold. There is 50 units remaining out of 520 units, so 520- 50 470 units have been sold and the unit cost will be the cost at it the inventory was purchased for There is 80 units remaining out of 500 units, so 500 80 420 units have been sold and the unit cost will be the cost at it the inventory was purchased for. There is entire 200 units remaining out of 200 unit purchases, so nothing has been sold, so no units will be recorded in cost of goods sold qty column.