Accounting 101- chapter 6

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 Acquired at Cost 200 units @ $10 -$ 2,000 Units Sold at Retail 150 units @ $40 Date Activities Jan. 1 Beginning inventory Jan. 10 Sales Mar.14 Purchase Mar.15 Sales July 30 Purchase Oct. 5 Sales Oct.26 Purchase 350 units @ $15 - 5,250 300 units @ $40 450 units @ $20 - 9, 000 430 units @ $40 @ $25 - 100 units 1,100 units 2,500 $18,750 Totals 880 units Exercise 6-7 Perpetual: Inventory costing methods-FIFO and LIFO LO P1 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. Perpetual FIFO: Goods Purchased # of Cost per units unit Cost of Goods Sold # of units Cost per Cost of Goods sold unit Sold Inventory Balance # of units Cost per Inventory Date January 1 200 @ $ 10.00 - $ 2,000.00 January 10 March 14 March 15 July 30 October 5 October 26 Totals $ 0.00 Perpetual LIFO: Goods Purchased Cost per units unit Cost of Goods Sold # of units Cost per Cost of Goods sold unit Sold # of Date Inventory Balance # of units Cost per Inventory unit Balance 200 @ $ 10.00 - $ 2,000.00 January 1 January 10 March 14 March 15 July 30 October 5 October 26 Totals $ 0.00 Compute the gross margin for FIFO method and LIFO method. FIFO: LIFO: Sales revenue Less: Cost of goods sold Gross margin Required 2 Required 3 >