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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.

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.

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter10: Inventory
Section: Chapter Questions
Problem 10PB: Calculate a) cost of goods sold, b) ending inventory, and c) gross margin for B76 Company,...
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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.

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: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
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$
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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