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

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

Units Sold at Retail

Jan.

1

Beginning inventory

220

units

@ $10.80

=

$

2,376

Jan.

10

Sales

190

units

@ $40.80

Mar.

14

Purchase

330

units

@ $15.80

=

5,214

Mar.

15

Sales

280

units

@ $40.80

July

30

Purchase

420

units

@ $20.80

=

8,736

Oct.

5

Sales

390

units

@ $40.80

Oct.

26

Purchase

120

units

@ $25.80

=

3,096

Totals

1,090

units

$

19,422

860

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.

Required 1 Required 2 Required 3 Determine the costs assigned to ending inventory and to cost of goods sold using FIFO. Perpetual FIFO: Goods Purchased # of units Cost of Goods Sold # of units Cost Cost of Goods sold per unit Sold Date Cost per unit Inventory Balance Cost # of units Inventory per unit Balance 220 @ $ 10.80 - $ 2,376.00 January 1 January 10 190 @ S 10.80 = $2.052.00 30 S 10.80 = s 324.00 March 14 330 @ S 15.00 30 @ S 324.00 $ 10.80 - S 15.00 = 330 @ 4,950.00 S 5.274.00 March 15 30 @ = S 10.80 = S 10.80 S 15.00 $ 324.00 0.00 S 324.00 @ @ July 30 October 5 October 26 Totals $2.376.00 Required 1 Required 2 Required 3 Determine the costs assigned to ending inventory and to cost of goods sold using LIFO. Perpetual LIFO: Goods Purchased Cost # of units Cost of Goods Sold # of units Cost Cost of Goods sold per unit Sold Date Inventory Balance Cost # of units Inventory per unit Balance 220 @ S 10.80 = $ 2.376.00 per unit January 1 January 10 March 14 March 15 July 30 October 5 October 26 Totals S 0.00 Required 1 Required 2 Required 3 Compute the gross margin for FIFO method and LIFO method. FIFO: LIFO: Sales revenue Less: Cost of goods sold Gross margin