[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

200

units

@ $10

=

$

2,000

Jan.

10

Sales

150

units

@ $40

Mar.

14

Purchase

350

units

@ $15

=

5,250

Mar.

15

Sales

300

units

@ $40

July

30

Purchase

450

units

@ $20

=

9,000

Oct.

5

Sales

430

units

@ $40

Oct.

26

Purchase

100

units

@ $25

=

2,500

Totals

1,100

units

$

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. 3. Compute the gross margin for FIFO method and LIFO method.

Required 1

Perpetual FIFO:
	Goods Purchased			Cost of Goods Sold					Inventory Balance
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	@	$10.00	=	$2,000.00
January 10				150	@	$10.00	=	$1,500.00	50	@	$10.00	=	$500.00
March 14	350	@	$15.00						50	@	$10.00	=	$500.00
									350	@	$15.00	=	5,250.00
													$5,750.00
March 15				50	@	$10.00	=	$500.00	0	@	$10.00	=
				250	@	$15.00	=	3,750.00	100	@	$15.00	=	$1,500.00
								$4,250.00					$1,500.00
July 30
October 5
October 26
Totals								$5,750.00

Requirement 3

	FIFO:	LIFO:
Sales revenue
Less: Cost of goods sold
Gross margin