Required information [The following information applies to the questions displayed below.] Hemming Company reported the following current-year purchases and sales for its only product. Date January 1 January 10 Activities Beginning inventory Units Acquired at Cost 200 units @ $10 = Units Sold at Retail $ 2,000 Sales 150 units @ $40 March 14 March 15 July 30 October 5 Purchase Sales Purchase Sales 350 units @ $15 5,250 300 units @ $40 450 units @ $20 9,000 430 units @ $40 October 26 Purchase Totals 100 units 1,100 units @ $25 2,500 $ 18,750 880 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 profit for FIFO method and LIFO method. Goods Purchased Perpetual FIFO: Cost of Goods Sold Date # of units Cost per unit # of units sold Cost per unit Cost of Goods Sold # of units Inventory Balance Cost per Inventory unit Balance January 1 200 at $10.00 = $2,000.00 January 10 150 at $10.00 = $ 1,500.00 50 at $ 10.00 = $ 500.00 350 at $15.00 50 at $10.00 = $ 500.00 March 14 Total March 14 March 15 Total March 15 July 30 Total July 30 October 5 Total October 5 October 26 450 at $ 20.00 100 at $25.00 350 at $ 15.00 = 5,250.00 $5,750.00 50 at $10.00 = $ 250 at $ 15.00 = 500.00 3,750.00 O at 100 at $10.00 $ 15.00 = $ 4,250.00 $ 1,500.00 $1,500.00 0 at 100 at 450 at $ 10.00 at $15.00 = 1,500.00 $ 20.00 = 9,000.00 $10,500.00 0 at 100 at $10.00 = $ 0.00 0 at $10.00 $15.00 = 300 at $ 20.00 = 1,500.00 6,000.00 0 at $15.00 150 at $ 20.00 = $ 7,500.00 3,000.00 $ 3,000.00 O at 0 at at $ 10.00 $15.00 150 at $ 20.00 = 3,000.00 Date # of units Cost per unit # of units sold Cost per Cost of Goods unit Sold January 1 # of units 200 at Cost per Inventory unit Balance $10.00 = $2,000.00 January 10 150 at $10.00 $ 1,500.00 50 at $ 10.00 = $ 500.00 350 at $ 15.00 March 14 Total March 14 March 15 Total March 15 July 30 Total July 30 October 5 Total October 5 October 26 Totals 450 at $20.00 100 at $25.00 50 at 250 at 50 at $10.00 = $ 500.00 350 at $ 15.00 = 5,250.00 $5,750.00 $10.00 = $ 15.00 = $ 500.00 3,750.00 $ 4,250.00 100 at 0 at $10.00 $15.00 $1,500.00 $ 1,500.00 0 at 100 at $ 10.00 $15.00 = 1,500.00 450 at $ 20.00 = 9,000.00 $10,500.00 0 at $10.00 = EA $ 0.00 0 at $10.00 100 at $ 15.00 = 1,500.00 0 at $ 15.00 300 at $ 20.00 = 6,000.00 150 at $ 20.00 = $ 7,500.00 0 at O at $10.00 $ 15.00 3,000.00 $ 3,000.00 150 at $ 20.00 = 100 at $25.00 $ 13,250.00 3,000.00 2,500.00 $ 5,500.00 Goods Purchased Perpetual LIFO: Cost of Goods Sold Date # of units Cost per unit # of units sold Cost per Cost of Goods unit Sold January 1 January 10 150 at $10.00 = $ 1,500.00 # of units 200 at 50 at Inventory Balance Cost per unit Inventory Balance $ 10.00 = $ 2,000.00 $ 10.00 = $ 500.00 350 at $ 15.00 50 at $ 10.00 = $ 500.00 March 14 350 at $ 15.00 = 5,250.00 Total March 14 $ 5,750.00 March 15 0 at 300 at $ 10.00 = $ 0.00 50 at $ 10.00 = $ 500.00 $ 15.00 = 4,500.00 50 at $ 15.00 = $ 750.00 Total March 15 $ 4,500.00 $ 1,250.00 450 at $ 20.00 50 at $10.00 = $ 500.00 July 30 50 at $ 15.00 = 450 at $ 20.00 = 750.00 9,000.00 Total July 30 $ 10,250.00 at $10.00 = = $ 0.00 at $10.00 October 5 at $15.00 = 0.00 at $ 15.00 at $ 20.00 = 0.00 at $ 20.00 Total October 5 October 26 100 at $ 25.00 at $ 10.00 at $ 15.00 at $ 20.00 at $25.00 Date # of units Cost per unit # of units sold Cost per unit Cost of Goods Sold # of units Cost per unit Inventory Balance January 1 200 at $ 10.00 = $ 2,000.00 January 10 150 at $ 10.00 = $ 1,500.00 50 at $ 10.00 = $ 500.00 350 at $ 15.00 March 14 50 at 350 at $ 10.00 = $ 500.00 $ 15.00 = 5,250.00 Total March 14 $ 5,750.00 March 15 0 at 300 at $10.00 = $ $ 15.00 = 0.00 Total March 15 4,500.00 $ 4,500.00 50 at $10.00 = $ 50 at 500.00 $ 15.00 = $ 750.00 $ 1,250.00 450 at $ 20.00 50 at $10.00 = $ 500.00 July 30 50 at $ 15.00 = 450 at $ 20.00 = 750.00 9,000.00 Total July 30 $ 10,250.00 at $10.00 = $ 0.00 at $ 10.00 October 5 at $ 15.00 = 0.00 at $ 15.00 at $ 20.00 = 0.00 at $ 20.00 Total October 5 October 26 Totals 100 at $ 25.00 at $ 10.00 at $ 15.00 at $ 20.00 at $ 25.00 $ 6,000.00 Sales revenue Less: Cost of goods sold Gross profit FIFO LIFO Hemming uses a periodic inventory system. (a) Determine the costs assigned to ending inventory and to cost of goods sold using FIFO. (b) Determine the costs assigned to ending inventory and to cost of goods sold using LIFO. (c) Compute the gross profit for each method. a) Periodic FIFO Beginning inventory Cost of Goods Available for Sale Cost of Goods Sold Ending Inventory # of units Cost per unit Cost of Goods Available for # of units sold Cost per unit Cost of Goods Sold Sale # of units in ending inventory Cost per unit Ending Inventory 200 $ 10.00 $ 2,000 200 $ 10.00 $ 2,000 Purchases: March 14 350 $ 15.00 5,250 350 $ 15.00 5,250 July 30 450 $ 20.00 9,000 October 26 100 $ 25.00 2,500 Total 1,100 $ 18,750 550 $ 7,250 b) Periodic LIFO Beginning inventory Purchases: March 14 July 30 October 26 Cost of Goods Available for Sale Cost of Goods Sold $ Ending Inventory # of units Cost per unit Cost of Goods Available for Sale # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory 200 $ 10.00 $ 2,000 350 $ 15.00 5,250 450 $ 20.00 9,000 100 $ 25.00 2,500 4400 c) Gross Profit FIFO LIFO