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 [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 225 units @ $11.00 = $ 2,475 340 units @ $16.00 5,440 150 units @ $41.00 Date Activities Jan. 1 Beginning inventory Jan. 10 Sales Mar. 14 Purchase Mar. 15 Sales July 30 Purchase Oct. 5 Sales Oct. 26 Purchase Totals 300 units @ $41.00 = 425 units @ $21.00 8,925 395 units @ $41.00 125 units @ $26.00 1,115 units 3,250 $20,090 845 units Perpetual FIFO: Goods Purchased Cost of Goods Sold Date # of units Cost per unit # of units sold Cost per Cost of Goods unit Sold Inventory Balance Cost per Inventory # of units unit Balance 225 @ S 11.00 = $ 2,475.00 January 1 January 10 March 14 March 15 July 30 October 5 October 26 Totals S 0.00 Perpetual LIFO: Goods Purchased Cost of Goods Sold Inventory Balance # of units Cost per unit # of units sold Cost per Cost of Goods unit Sold Cost per # of units unit 225 @ $ 11.00 = Inventory Balance $ 2,475.00 Date January 1 January 10 March 14 March 15 July 30 October 5 October 26 Totals S 0.00 Compute the gross margin for FIFO method and LIFO method. FIFO: LIFO: Sales revenue Less: Cost of goods sold Gross margin