Exercise 5-8 (Algo) Perpetual: Inventory costing methodsFIFO 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 profit for FIFO method and LIFO method.

Required information Use the following information for the Exercises 8-10 below. (Algo) [The following information applies to the questions displayed below.] Hemming Company reported the following current-year purchases and sales for its only product. Units Sold at Retail Units Acquired at Cost 215 units @ $10.60 = @ $ 2,279 180 units @ $40.60 320 units @ $15.60 = Date January 1 January 10 March 14 March 15 July 30 October 5 October 26 Activities Beginning inventory Sales Purchase Sales Purchase Sales Purchase 4,992 260 units @ $40.60 415 units @ $20.60 = 8,549 400 units @ $40.60 115 units @ $25.60 = 2,944 $ 18,764 Totals 1,065 units 840 units Perpetual FIFO: Cost of Goods Sold Cost Cost of Goods per unit Sold Date Goods Purchased Cost # of units per unit # # of units sold # of units Inventory Balance Cost Inventory per Balance unit $ 10.60 $ 2,279.00 January 1 215 at January 10 180 at $ 40.60 = $ 7,308.00 35 at $ 10.60 = $ 371.00 320 at $ 15.60 35 at $ 10.60 $ 371.00 March 14 320 at $ 15.60 = 4,992.00 Total March 14 S 5,363.00 260 x at $ 2,756.00 $ 10.60 March 15 $ 10.60 $ 15.60 0 at 260 X at 60 X at = 936.00 $ 15.60 $ 4,056.00 $ 4,056.00 Total March 15 $ 3,692.00 415 at at $ 20.60 0 at $ 10.60 July 30 at $ 15.60 at $20.60 Total July 30 October 5 Total October 5 5 115 at $ 25.60 October 26 at $ 25.60 Totals $ 11,000.00 Perpetual LIFO: Cost of Goods Sold Cost # of units Cost of Goods sold per Sold unit Goods Purchased Cost # of units per unit Date Inventory Balance Cost Inventory # of units per Balance unit January 1 January 10 March 14 Total March 14 March 15 Total March 15 July 30 Total July 30 October 5 Total October 5 October 26 Totals $ 0.00 Compute the gross profit for FIFO method and LIFO method. FIFO LIFO Sales revenue Less: Cost of goods sold Gross profit