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.

Date

Activities

Units Acquired at Cost

Units Sold at Retail

Jan.

1

Beginning inventory

270

units

@ $12.80

=

$

3,456

Jan.

10

Sales

220

units

@ $42.80

Mar.

14

Purchase

400

units

@ $17.80

=

7,120

Mar.

15

Sales

340

units

@ $42.80

July

30

Purchase

470

units

@ $22.80

=

10,716

Oct.

5

Sales

440

units

@ $42.80

Oct.

26

Purchase

170

units

@ $27.80

=

4,726

Totals

1,310

units

$

26,018

1,000

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 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 Cost per units unit Cost of Goods Sold # of units Cost per Cost of Goods sold Sold Date unit Inventory Balance Cost per # of units Inventory unit Balance 270 @ $ 12.80 = $ 3,456.00 January 1 220 @ 12.81 @ January 10 March 14 March 15 July 30 October 5 October 26 Totals $ 0.00 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 # of units unit Cost per Cost of Goods Sold # of units Cost per Cost of Goods sold unit Sold Date Inventory Balance Cost per Inventory # of units unit Balance 270 @ $ 12.80 = $ 3,456.00 January 1 January 10 March 14 March 15 July 30 October 5 October 26 Totals $ 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