Hemming Company reported the following current-year purchases and sales for its only product. Date Activities Units Acquired at Cost Units Sold at Retail January 1 Beginning inventory 205 units @ $10.20 = $ 2,091 January 10 Sales 160 units @ $40.20 March 14 Purchase 300 units @ $15.20 = 4,560 March 15 Sales 250 units @ $40.20 July 30 Purchase 400 units @ $20.20 = 8,080 October 5 Sales 375 units @ $40.20 October 26 Purchase 105 units @ $25.20 = 2,646 Totals 1,010 units $ 17,377 785 units Required: Hemming uses a perpetual inventory system. Determine the costs assigned to ending inventory and to cost of goods sold using FIFO. Determine the costs assigned to ending inventory and to cost of goods sold using LIFO. Compute the gross profit for FIFO method and LIFO method. Determine the costs assigned to ending inventory and to cost of goods sold using FIFO. Perpetual FIFO: Date Goods Purchased Cost of Goods Sold Inventory Balance # of units Cost per unit # of units sold Cost per unit Cost of Goods Sold # of units Cost per unit Inventory Balance January 1 January 10 March 14 Total March 14 March 15 Total March 15 July 30 Total July 30 October 5 Total October 5 October 26 Totals $0.00 Determine the costs assigned to ending inventory and to cost of goods sold using LIFO. Perpetual LIFO: Date Goods Purchased Cost of Goods Sold Inventory Balance # of units Cost per unit # of units sold Cost per unit Cost of Goods Sold # of units Cost per unit Inventory Balance January 1 January 10 March 14 Total March 14 March 15 Total March 15 July 30 Total July 30 October 5 Total October 5 October 26 Totals $0.00 Compute the gross profit for FIFO method and LIFO method. FIFO LIFO Sales revenue Less: Cost of goods sold Gross profit

Hemming Company reported the following current-year purchases and sales for its only product. Date Activities Units Acquired at Cost Units Sold at Retail January 1 Beginning inventory 205 units @ $10.20 = $ 2,091 January 10 Sales 160 units @ $40.20 March 14 Purchase 300 units @ $15.20 = 4,560 March 15 Sales 250 units @ $40.20 July 30 Purchase 400 units @ $20.20 = 8,080 October 5 Sales 375 units @ $40.20 October 26 Purchase 105 units @ $25.20 = 2,646 Totals 1,010 units $ 17,377 785 units Required: Hemming uses a perpetual inventory system. Determine the costs assigned to ending inventory and to cost of goods sold using FIFO. Determine the costs assigned to ending inventory and to cost of goods sold using LIFO. Compute the gross profit for FIFO method and LIFO method. Determine the costs assigned to ending inventory and to cost of goods sold using FIFO. Perpetual FIFO: Date Goods Purchased Cost of Goods Sold Inventory Balance # of units Cost per unit # of units sold Cost per unit Cost of Goods Sold # of units Cost per unit Inventory Balance January 1 January 10 March 14 Total March 14 March 15 Total March 15 July 30 Total July 30 October 5 Total October 5 October 26 Totals $0.00 Determine the costs assigned to ending inventory and to cost of goods sold using LIFO. Perpetual LIFO: Date Goods Purchased Cost of Goods Sold Inventory Balance # of units Cost per unit # of units sold Cost per unit Cost of Goods Sold # of units Cost per unit Inventory Balance January 1 January 10 March 14 Total March 14 March 15 Total March 15 July 30 Total July 30 October 5 Total October 5 October 26 Totals $0.00 Compute the gross profit for FIFO method and LIFO method. FIFO LIFO Sales revenue Less: Cost of goods sold Gross profit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Date	Activities	Units Acquired at Cost	Units Sold at Retail
January 1	Beginning inventory	205	units	@ $10.20	=	$ 2,091
January 10	Sales						160	units	@ $40.20
March 14	Purchase	300	units	@ $15.20	=	4,560
March 15	Sales						250	units	@ $40.20
July 30	Purchase	400	units	@ $20.20	=	8,080
October 5	Sales						375	units	@ $40.20
October 26	Purchase	105	units	@ $25.20	=	2,646
	Totals	1,010	units			$ 17,377	785	units

Required:

Hemming uses a perpetual inventory system.

Determine the costs assigned to ending inventory and to cost of goods sold using FIFO.
Determine the costs assigned to ending inventory and to cost of goods sold using LIFO.
Compute the gross profit for FIFO method and LIFO method.

Determine the costs assigned to ending inventory and to cost of goods sold using FIFO.

Perpetual FIFO:

Date

Goods Purchased

Cost of Goods Sold

Inventory Balance

# of units

Cost per unit

# of units sold

Cost per unit

Cost of Goods Sold

# of units

Cost per unit

Inventory Balance

January 1

January 10

March 14

Total March 14

March 15

Total March 15

July 30

Total July 30

October 5

Total October 5

October 26

Totals

$0.00

Determine the costs assigned to ending inventory and to cost of goods sold using LIFO.

Perpetual LIFO:

Date

Goods Purchased

Cost of Goods Sold

Inventory Balance

# of units

Cost per unit

# of units sold

Cost per unit

Cost of Goods Sold

# of units

Cost per unit

Inventory Balance

January 1

January 10

March 14

Total March 14

March 15

Total March 15

July 30

Total July 30

October 5

Total October 5

October 26

Totals

$0.00

Compute the gross profit for FIFO method and LIFO method.

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

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