Required information

Use the following information for the Exercises below.

[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

270

units

@ $12.80

=

$

3,456

Jan.

10

Sales

220

units

@ $42.80

Mar.

14

Purchase

400

units

@ $17.80

=

7,120

Mar.

15

Sales

340

units

@ $42.80

July

30

Purchase

470

units

@ $22.80

=

10,716

Oct.

5

Sales

440

units

@ $42.80

Oct.

26

Purchase

170

units

@ $27.80

=

4,726

Totals

1,310

units

$

26,018

1,000

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.

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 1 270 @ $12.80 = $3,456.00 January 10 220 @ $12.80 = $2,816.00 50 @ $12.80 = $640.00 March 14 400 @ $17.80 50 @ $12.80 = $640.00 400 @ $17.80 = 7,120.00 $7,760.00 March 15 @ $12.80 = $0.00 @ @ $17.80 = 0.00 @ July 30 October 5 October 26 Totals $2,816.00