**Inventory Analysis: FIFO and LIFO Methods****Background Information**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| 300 units @ $14.00 | $4,200 || January 10 | Sales | | 250 units @ $44.00 || March 14 | Purchase | 520 units @ $19.00 | $9,880 || March 15 | Sales | | 460 units @ $44.00 || July 30 | Purchase | 500 units @ $24.00 | $12,000 || October 5 | Sales | | 480 units @ $44.00 || October 26 | Purchase | 200 units @ $29.00 | $5,800 || **Totals** | | 1,520 units | 1,190 units || | | $31,880 | |**Requirements:**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 profit for FIFO method and LIFO method.****Instructions:**Complete this question by entering your answers in the tabs provided.**Analysis of LIFO Method**Under the "Perpetual LIFO" section:| Date | Goods Purchased | Cost of Goods Sold | Inventory Balance ||------|--------------------------------------------|----------------------------|-------------------------------|| | # of units | Cost per unit | | # of units | Cost per unit | # of units | Cost per unit || | | | Goods Sold | | | | |*Note: The table is intended to calculate the costs associated with LIFO inventory accounting, requiring inputs for each purchase and sale transaction.*The educational website would provide users with interactive tabs labeled:- **Required 1:** For answering about FIFO calculations.- **Required 2:** For LIFO calculations.-

Gross profit is the calculation of deduction of cost of goods sold from the sales of the company. It…

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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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Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions. Date Activities Units Acquired at Cost Units Sold at Retail January 1 Beginning inventory 700 units @ $50 per unit February 10 Purchase 300 units @ $46 per unit March 13 Purchase 100 units @ $40 per unit March 15 Sales 780 units @ $70 per unit August 21 Purchase 110 units @ $55 per unit September 5 Purchase 570 units @ $52 per unit September 10 Sales 680 units @ $70 per unit Totals 1,780 units 1,460 units Required:1. Compute cost of goods available for sale and the number of units available for sale. 2. Compute the number of units in ending inventory Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. (For specific identification, units sold consist of 700 units from beginning inventory, 200 from the February…
Laker Company reported the following January purchases and sales data for its only product. Date Activities Units Acquired at Cost Units sold at Retail Jan. 1 Beginning inventory 145 units @ $ 7.00 = $ 1,015 Jan. 10 Sales 105 units @ $ 16.00 Jan. 20 Purchase 70 units @ $ 6.00 = 420 Jan. 25 Sales 85 units @ $ 16.00 Jan. 30 Purchase 190 units @ $ 5.50 = 1,045 Totals 405 units $ 2,480 190 units The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 215 units, where 190 are from the January 30 purchase, 5 are from the January 20 purchase, and 20 are from beginning inventory. Exercise 5-3 Perpetual: Inventory costing methods LO P1 Required:1. Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification.2. Determine the cost…
Required information [The following information applies to the questions displayed below.] Laker Company reported the following January purchases and sales data for its only product. For specific identification, ending inventory consists of 385 units from the January 30 purchase, 5 units from the January 20 purchase, and 15 units from beginning inventory. Date January 1 January 10 January 20 January 25 Activities Beginning inventory Sales Purchase Sales January 30 Purchase Totals Units Acquired at Cost 225 units @$ 15.00 = 180 units @ $ 14.00 = 385 units @ $ 12.00 = 790 units Units sold at Retail $ 3,375 2,520 4,620 $ 10,515 175 units 210 units 0 $ 24.00 $ 24.00 385 units Assume the perpetual inventory system is used. Required: 1. Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification. 2. Determine the cost assigned to ending inventory and to cost of goods sold using weighted average. 3. Determine the cost assigned to…
[The following Information applies to the questions displayed below.] Laker Company reported the following January purchases and sales data for Its only product. Date Activities Units Acquired at Cost 225 units @ $15.e0 = $ 3,375 Units sold at Retail Jan. 1 Beginning inventory Jan. 10 sales 175 units @ $24.00 Jan. 20 Purchase 180 units @ $14.ee - 2,520 Jan. 25 Sales 210 units e $24.00 Jan. 30 Purchase 350 units @ $13.50 = 4,725 Totals 755 units $18,620 385 units The Company uses a perpetual Inventory system. For specific lidentification, ending Inventory consists of 370 units, where 350 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning Inventory. Requlred: 1. Complete the table to determine the cost assigned to ending Inventory and cost of goods sold using specific Identification. 2. Determine the cost assigned to ending Inventory and to cost of goods sold using welghted average. 3. Determine the cost assigned to ending Inventory and to…
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 210 units @ $10.40 = $ 2,184 Jan. 10 Sales 170 units @ $40.40 Mar. 14 Purchase 310 units @ $15.40 = 4,774 Mar. 15 Sales 270 units @ $40.40 July 30 Purchase 410 units @ $20.40 = 8,364 Oct. 5 Sales 380 units @ $40.40 Oct. 26 Purchase 110 units @ $25.40 = 2,794 Totals 1,040 units $ 18,116 820 units Exercise 5-9A Periodic: Inventory costing system LO P3 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.
Required information [The following information applies to the questions displayed below.] Hemming Company reported the following current-year purchases and sales for its only product. Date January 1 January 10 March 14 March 151 July 30 October 5 October 26 Activities beginning inventory Sales Purchase Sales Purchase Sales Purchase Totals Required: Hemming uses a perpetual inventory system. Units Acquired at Cost $11.40- 235 units 360 units 435 units 135 units 1,165 units $16.40- $21.40- $26.40- $ 2,679 5,904 9,309 3,564 $ 21,456 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 profit for FIFO method and LIFO method. Units Sold at Retail 170 units 290 units 410 units 870 units $41.40 $41.40 @$41.40
Laker Company reported the following January purchases and sales data for its only product. Date Activities Units Acquired at Cost Units sold at Retail Jan. 1 Beginning inventory 145 units @ $ 7.00 = $ 1,015 Jan. 10 Sales 105 units @ $ 16.00 Jan. 20 Purchase 70 units @ $ 6.00 = 420 Jan. 25 Sales 85 units @ $ 16.00 Jan. 30 Purchase 190 units @ $ 5.50 = 1,045 Totals 405 units $ 2,480 190 units The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 215 units, where 190 are from the January 30 purchase, 5 are from the January 20 purchase, and 20 are from beginning inventory. Exercise 5-4 Perpetual: Income effects of inventory methods LO A1 Required:1. Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are $1,300…
Required information [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 100 units@ $56.00 per unit 400 units@ $61.00 per unit Date Activities Units Sold at Retail 1 Beginning inventory 5 Purchase 9 Sales Mar. Mar. Mar. 420 units @ $91.00 per unit 120 units @ $66.00 per unit 200 units @ $68.00 per unit Mar. 18 Purchase Mar. 25 Purchase Mar. 29 Sales 160 units @ $101.00 per unit Totals 820 units 580 units 2. Compute the number of units in ending inventory. Ending inventory units
Required information [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. Date Activities Units Acquired at Cost Units Sold at Retail March 1 March 5 Beginning inventory Purchase 250 units @ $54.00 per unit 300 units March 9 Sales March 18 Purchase March 25 Purchase 160 units 300 units @ $59.00 per unit $64.00 per unit 410 units @ $89.00 per unit @ $66.00 per unit March 29 Sales Totals 280 units $99.00 per unit 1,010 units 690 units 4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, units sold include 140 units from beginning inventory, 270 units from the March 5 purchase, 120 units from the March 18 purchase, and 160 units from the March 25 purchase. Note: Round weighted average cost per unit to two decimals and final answers to nearest whole dollar. Gross Margin FIFO LIFO…
Required information Skip to question [The following information applies to the questions displayed below.] Laker Company reported the following January purchases and sales data for its only product. For specific identification, ending inventory consists of 400 units from the January 30 purchase, 5 units from the January 20 purchase, and 15 units from beginning inventory. Date Activities Units Acquired at Cost Units sold at Retail January 1 Beginning inventory 230 units @ $ 15.50 = $ 3,565 January 10 Sales 180 units @ $ 24.50 January 20 Purchase 190 units @ $ 14.50 = 2,755 January 25 Sales 220 units @ $ 24.50 January 30 Purchase 400 units @ $ 14.00 = 5,600 Totals 820 units $ 11,920 400 units Assume the perpetual inventory system is used. Required: Compute gross profit for the month of January for Laker Company for the four inventory methods. Which method yields the highest gross profit? Does gross profit using weighted average fall between that using FIFO and LIFO? If costs were rising…
[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 195 units @ $13.80 = $ 2,691 Jan. 10 Sales 185 units @ $43.80 Mar. 14 Purchase 345 units @ $18.80 = 6,486 Mar. 15 Sales 235 units @ $43.80 July 30 Purchase 495 units @ $23.80 = 11,781 Oct. 5 Sales 205 units @ $43.80 Oct. 26 Purchase 695 units @ $28.80 = 20,016 Totals 1,730 units $ 40,974 625 units Required: Hemming uses a perpetual inventory system. Compute the gross margin for FIFO method. Sales revenue Less: cost of goods sold Gross Margin…
! Required information [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. Total Date March 1 March 5 March 9 March 18 March 25 March 29 Beginning inventory Purchases: March 5 March 18 March 25 Activities Beginning inventory Purchase Sales Purchase Purchase Sales Totals Units Acquired at Cost 220 units @ $53.40 per unit 285 units @ $58.40 per unit Required: 1. Compute cost of goods available for sale and the number of units available for sale. 145 units @ $63.40 per unit 270 units @ $65.40 per unit # of units 920 units Cost of Goods Available for Sale Cost per Cost of Goods Available Unit for Sale Units Sold at Retail 380 units @ $88.40 per unit 250 units @ $98.40 per unit 630 units

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