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 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 margin for each method.
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 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 margin for each method.
Chapter1: Financial Statements And Business Decisions
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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 | 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 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 margin for each method.
Transcribed Image Text:b) Periodic LIFO
Cost of Goods Available for Sale
Cost of Goods Sold
Ending Inventory
Cost of Goods
# of units
Cost per
unit
# of units Cost per
unit
Ending
per unit Inventory
Cost of
Cost
# of units
Available for
Sale
in ending
inventory
sold
Goods Sold
Beginning inventory
Purchases:
March 14
July 30
October 26
Total
$
$
$
c) Gross Margin
FIFO
LIFO
Transcribed Image Text:a) Periodic FIFO
Cost of Goods Available for Sale
Cost of Goods Sold
Ending Inventory
# of units
in ending
inventory
Cost of Goods
Cost per
# of units
sold
Cost of
Cost per
unit
Ending
per unit Inventory
Cost
# of units
Available for
unit
Goods Sold
Sale
Beginning inventory
Purchases:
March 14
July 30
October 26
Total
$
$
2$
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