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 Sold at Retail Units Acquired at Cost 270 units @ $12.80 - $ 3,456 220 units @ $42.80 400 units @ $17.80 - 7,120 Date Activities Jan. 1 Beginning inventory Jan.10 Sales Mar.14 Purchase Mar.15 Sales July30 Purchase Oct. 5 Sales Oct.26 Purchase Totals 340 units @ $42.80 470 units @ $22.80 - 10,716 440 units @ $42.80 170 units @ $27.80 = 1,310 units 4,726 $26,018 1,000 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 Date Inventory Balance # of unite # of units Cost per Inventory # of units unit Balance 270 @ $ 12.80 = $ 3,456.00 January 1 January 10 10 March 14 March 15 July 30 October 5 October 26 Totals $ 0.00 Perpetual LIFO: Goods Purchased # of Cost per units unit Cost of Goods Sold # of units Cost per cost of Goods sold unit Sold Date Inventory Balance # of units Cost per Inventory unit Balance 270 @ $ 12.80 = $ 3,456.00 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