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.
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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 | 250 | units | @ $12.00 | = | $ | 3,000 | ||||||||
| Jan. | 10 | Sales | 200 | units | @ $42.00 | |||||||||||
| Mar. | 14 | Purchase | 400 | units | @ $17.00 | = | 6,800 | |||||||||
| Mar. | 15 | Sales | 360 | units | @ $42.00 | |||||||||||
| July | 30 | Purchase | 450 | units | @ $22.00 | = | 9,900 | |||||||||
| Oct. | 5 | Sales | 420 | units | @ $42.00 | |||||||||||
| Oct. | 26 | Purchase | 150 | units | @ $27.00 | = | 4,050 | |||||||||
| Totals | 1,250 | units | $ | 23,750 | 980 | units | ||||||||||
Exercise 5-7 Perpetual: Inventory costing methods-FIFO 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.
Transcribed Image Text:October 26
Totals
$ 8,400.00
< Required 1
Required 2 >
Transcribed Image Text:Perpetual FIFO:
Goods Purchased
# of
Cost of Goods Sold
Inventory Balance
Cost per
unit
# of units
Cost per
unit
Cost of Goods
Cost per
Inventory
Balance
Date
# of units
units
sold
Sold
unit
January 1
250 @
$ 12.00 =
$
3,000.00
January 10
200 @
$ 42.00
$ 8,400.00
$ 12.00 =
March 14
March 15
July 30
October 5
October 26
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