Exercise 5-7 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.

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. Date Activities Units Acquired at Cost 200 units @ $10 = $ 2,000 Units Sold at Retail 150 units @ $40 350 units @ $15 = 5,250 Jan. 1 Beginning inventory Jan.10 Sales Mar.14 Purchase Mar.15 Sales July30 Purchase Oct. 5 Sales Oct.26 Purchase 300 units@ $40 450 units@ $20 = 9,000 430 units @ $40 100 units @ $25 2,500 $18,750 Totals 1,100 units 880 units FIFO: LIFO: Sales revenue Less: Cost of goods sold Gross margin