Exercise 6-7 Perpetual: Inventory costing methods-FIFO and LIFO LO P1

[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

Units Sold at Retail

Jan.

1

Beginning inventory

150

units

@ $12.00

=

$

1,800

Jan.

10

Sales

140

units

@ $42.00

Mar.

14

Purchase

300

units

@ $17.00

=

5,100

Mar.

15

Sales

190

units

@ $42.00

July

30

Purchase

450

units

@ $22.00

=

9,900

Oct.

5

Sales

250

units

@ $42.00

Oct.

26

Purchase

650

units

@ $27.00

=

17,550

Totals

1,550

units

$

34,350

580

units

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.

4. Compute the gross margin for LIFO method.