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 Jan. 1 Beginning inventory Jan. 10 Sales Mar. 14 Purchase Activities Units Acquired at Cost 260 units $12.40= $ 3,224 Units Sold at Retail 215 units $42.40 420 units@ $17.40 7,308 380 units@ $42.40 Mar. 15 Sales 460 units@ $22.40 July 30 Purchase Oct. 5 Sales 10,304 425 units $42.40 160 units@ $27.40 Oct. 26 Purchase 4,384 $25,220 1,300 units 1,020 units Totals Exercise 5-7 Perpetual: Inventory costing methods-Fl FO 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: Inventory Balance Goods Purchased Cost of Goods Sold Cost per unit Cost per unit Cost per unit Cost of Goods Sold #of #of units sold Inventory Balance Date of units units January 1 260@ 3,224.00 $12.40 January 10 215@ $2,666.00 $12.40 $12.40 March 14 420@$17.40 $12.40 $17.40 March 15 380 $12.40 July 30 October 5 October 26 Totals $2,666.00 ) Required 1 Required 2 Required 3 Determine the costs assigned to ending inventory and to cost of goods sold using LIFO Perpetual LIFO: Cost of Goods Sold Inventory Balance Goods Purchased Cost per unit #of Cost per unit Cost of Goods Sold Cost per unit #of units sold Inventory Balance Date #of units units January 1 260 $ 3,224.00 $12.40 January 10 March 14 March 15 July 30 October 5 October 26 0.00 $ Totals 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 Required 2 Hemming Co. reported the following current-year purchases and sales for its only product. Units Acquired at Cost 260 units $12.40= $ 3,224 Activities Units Sold at Retail Date Jan. 1 Beginning inventory Jan. 10 Sales 215 units $42.40 420 units $17.40 Mar. 14 Purchase 7,308 = 380 units $42.40 Mar.15 Sales 460 units $22.40 July 30 Purchase 10,304 425 units $42.40 Oct. 5 Sales 160 units $27.40 Oct. 26 Purchase 4,384 Totals $25,220 1,020 units 1,300 units Exercise 5-8 Specific identification LO P1 Required: Hemming uses a perpetual inventory system. Assume that ending inventory is made up of 45 units from the March 14 purchase, 75 units from the July 30 purchase, and all 160 units from the October 26 purchase. Using the specific identification method, calculate the following. a) Cost of Goods Sold using Specific Identification Available for Sale Cost of Goods Sold Ending Inventory Ending Inventory Unit Cost Units Ending Inventory Cost Unit Units Sold Unit Cost Date Activity Units COGS Cost Beginning Inventory Purchase 0.00 $ 0.00 $ Jan. 1 260 0 Mar. 14 420 $ 0.00 $ 0 $ 0.00 0 July 30 0.00 Purchase 460 0.00 $ 0 Oct. 26 S 0.00 S 0.00 Purchase 160 1,300 0 0 0 b) Gross Margin using Specific Identification Less: Equals: ! Required information Problem 5-1A Perpetual: Alternative cost flows LO P1 [The following information applies to the questions displayed below.] Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March Units Acquired at Cost 60 units $50.20 per unit 205 units $55.20 per unit Activities Units Sold at Retail Date 1 Beginning inventory 5 Purchase 9 Sales Mar Mar 220 units $85.20 per unit Mar 65 units $60.20 per unit 110 units $62.20 per unit 18 Purchase Mar. 25 Purchase Mar. Mar. 29 Sales 90 units@ $95.20 per unit 440 units 310 units Totals Problem 5-1A Part 1 Required: 1. Compute cost of goods available for sale and the number of units available for sale. Cost of Goods Available for Sale Cost of Goods Available for Sale Cost per Unit #of units Beginning inventory Purchases: March 5 March 18 March 25 Total Required information Problem 5-1A Perpetual: Alternative cost flows LO P1 [The following information applies to the questions displayed below.] Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. Activities Units Acquired at Cost 60 units $50.20 per unit 205 units$55.20 per unit Units Sold at Retail Date 1 Beginning inventory 5 Purchase 9 Sales Mar Mar. 220 units@$85.20 per unit Mar. 65 units@$60.20 per unit 110 units $62.20 Mar. 18 Purchase 25 Purchase unit Mar 90 units $95.20 per unit 29 Sales Mar. 440 units Totals 310 units Problem 5-1A Part 2 2. Compute the number of units in ending inventory. Ending inventory units ! Required information Problem 5-1A Perpetual: Alternative cost flows LO P1 [The following information applies to the questions displayed below.] Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. Units Acquired at Cost 60 units@$50.20 per unit 205 units $55.20 per unit Activities Units Sold at Retail Date 1 Beginning inventory 5 Purchase 9 Sales Mar. Mar. 220 units@$85.20 per unit Mar 65 units@$60.20 per unit 110 units@$62.20 per unit Mar. 18 Purchase Mar. 25 Purchase 90 units $95.20 per unit Mar. 29 Sales 310 units 440 units Totals Problem 5-1A Part 3 3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 45 units from beginning inventory and 175 units from the March 5 purchase; the March 29 sale consisted of 25 units from the March 18 purchase and 65 units from the March 25 purchase. Weighted Average Perpetual FIFO Perpetual LIFO Specific Id Compute the cost assigned to ending inventory using FIFO Perpetual FIFO: Goods Purchased Cost of Goods Sold Inventory Balance Cost per Cost per unit Cost per unit #of units of units sold Inventory Balance #of units Date Cost of Goods Sold unit 60@ March 1 3,012.00 $50.20 March 5 March 9 March 18 March 25 March 29 Totals 0.00 Weighted Average Specific Id Perpetual FIFO Perpetual LIFO Compute the cost assigned to ending inventory using LIFO Perpetual LIFO: Goods Purchased Cost of Goods Sold Cost per Cost of Goods Sold unit Inventory Balance Cost per unit Cost per unit #of units #of units sold Inventory Balance #of units Date March 1 60@ $ 3,012.00 $50.20 March 5 March 9 March 18 March 25 March 29 Totals 0.00 Weighted Average Perpetual FIFO Perpetual LIFO Specific Id Compute the cost assigned to ending inventory using weighted average. (Round your average cost per unit to 2 decimal places.) Weighted Average Perpetual: Goods Purchased Cost of Goods Sold Inventory Balance Cost per Cost per Cost of Goods Sold unit Cost per Inventory Balance unit #of units #of units sold Date #of units unit March 1 60 $50.20 3,012.00 March 5 Average March 9 March 18 Average March 25 March 29 0.00 Totals Specific Id Perpetual LIFO Weighted Average Perpetual FIFO Perpetual LIFO Specific Id Compute the cost assigned to ending inventory using specific identification. For specific identification, the March 9 sale consisted of 45 units from beginning inventory and 175 units from the March 5 purchase; the March 29 sale consisted of 25 units from the March 18 purchase and 65 units from the March 25 purchase. Specific Identification: Goods Purchased Inventory Balance Cost of Goods Sold Cost per unit Cost per Inventory Balance unit Cost per unit # of units Cost of Goods Sold #of #of units Date units sold March 1 60@ 3,012.00 $50.20 $ March 5 March 9 March 18 March 25 March 29 Totals 0.00 Required information Problem 5-1A Perpetual: Alternative cost flows LO P1 [The following information applies to the questions displayed below.] Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. Activities Units Acquired at Cost 60 units$50.20 per unit 205 units$55.20 per unit Units Sold at Retail Date Mar 1 Beginning inventory 5 Purchase Mar. 220 units $85.20 per unit Mar. Mar. 18 Purchase Mar. 25 Purchase 9 Sales 65 units@ $60.20 per unit 110 units@$62.20 per unit 90 units $95.20 per unit Mar. 29 Sales 440 units 310 units Totals Problem 5-1A Part 4 4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 45 units from beginning inventory and 175 units from the March 5 purchase; the March 29 sale consisted of 25 units from the March 18 purchase and 65 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.) Gross Margin Avg. Cost Spec. ID FIFO LIFO Sales Less: Cost of goods sold Gross profit Exercise 5-10 Lower of cost or market LO P2 Martinez Company's ending inventory includes the following items. Product Units Cost per Unit 50 Market per Unit 54 Helmets 22 Bats 15 78 72 Shoes 36 95 91 Uniforms 40 36 36 Compute the lower of cost or market for ending inventory applied separately to each product. Per Unit Total LCM Applied to Items Inventory Items Units Cost Market Cost Market Helmets Bats Shoes 22 $ 50 54 15 78 72 36 95 91 Uniforms 40 36 t 36 Exercise 5-12 Analysis of inventory errors LO A2 Vibrant Company had $990,000 of sales in each of three consecutive years 2016-2018, and it purchased merchandise costing $545,000 in each of those years. It also maintained a $290,000 physical inventory from the beginning to the end of that three-year period. In accounting for inventory, it made an error at the end of year 2016 that caused its year-end 2016 inventory to appear on its statements as $270,000 rather than the correct $290,000. Required: 1. Determine the correct amount of the company's gross profit in each of the years 2016-2018. 2. Prepare comparative income statements to show the effect of this error on the company's cost of goods sold and gross profit for each of the years 2016-2018. Complete this questions by entering your answers in the below tabs. Required 1 Required 2 Determine the correct amount of the company's gross profit in each of the years 2016-2018 VIBRANT COMPANY Comparative Income Statements 2016 2017 2018 3-year total 0 Cost of goods sold 0 0 0 Cost of goods sold 0 0 0 0 Gross profit $ 0 $ 0 $ 0 Required 2 Required 1 Exercise 5-12 Analysis of inventory errors LO A2 Vibrant Company had $990,000 of sales in each of three consecutive years 2016-2018, and it purchased merchandise costing $545,000 in each of those years. It also maintained a $290,000 physical inventory from the beginning to the end of that three-year period. In accounting for inventory, it made an error at the end of year 2016 that caused its year-end 2016 inventory to appear on its statements as $270,000 rather than the correct $290,000. Required: 1. Determine the correct amount of the company's gross profit in each of the years 2016-2018 2. Prepare comparative income statements to show the effect of this error on the company's cost of goods sold and gross profit for each of the years 2016-2018. Complete this questions by entering your answers in the below tabs. Required 1 Required 2 Prepare comparative income statements to show the effect of this error on the company's cost of goods sold and gross profit for each of the years 2016-2018. VIBRANT COMPANY Comparative Income Statements 2016 2017 2018 3-year total 0 Cost of goods sold 0 0 0 Cost of goods sold 0 0 Gross profit 0 $ 0 $ Required 1 Required 2