Required Information[The following information applies to the questions displayed below.]Hemming Co. reported the following current-year purchases and sales for its only product.ActivitiesUnits Acquired at Cost3e0 units e $14.00 - $ 4,200DateUnits Sold at RetailJan. 1 Beginning inventoryJan. 10 Sales250 units e s44.00Mar.14 PurchaseMar. 15 SalesJuly 30 PurchaseOct. 5 SalesOct.26 Purchase520 units e $19.00 -9,88e468 units e $44.80see units e $24.0012, 800488 units e $44.00200 units e $29.e05,800Totals1,520 units$31,8801,198 unitsRequired:Hemming uses a periodic inventory system.(e) Determine the costs essigned to ending inventory and to cost of goods sold using FIFO.(b) Determine the costs ossigned to ending inventory and to cost of goods sold using LIFO.(c) Compute the gross margin for each method.a) Perlodic FIFOCost of Goode Avallable for SaleCost of Goode soldEnding InventoryCost of Goode# of uniteCost perunit# of unite Cost persoldCost ofCostEndingper unit Inventory# of uniteAvallable forSaleIn endingInventoryunitGoode SoldBeginning inventory300 S 14.004,200250 S 14.003,500Purchases:March 14520 s 19.009,880460 S 19.008,740July 30500s 24.0012,000October 26200Total1,52026.08071012,240b) Perlodic LIFOCost of Goode Avallable for SaleCoat of Goode SoldEnding InventoryCost of GoodeAvallable forSale# of uniteof unita Cost perunit# of units Cost peraoldCoat ofCostIn endingInventoryEndingper unit InventoryunitGoods SoldBeginning inventory30014.004,200Purchases:March 1452019.009.880July 30500S 24.0012.000October 26200Total1,52026.080c) Grose MarginFIFOLIFO

a. Computation of ending inventory and cost of goods sold under Periodic FIFO a) periodic FIFO…

Answered: Hemming Co. reported the following…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 50E: Inventory Costing Methods Crandall Distributors uses a perpetual inventory system and has the...

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Lower of Cost or Market Garcia Company uses FIFO, and its inventory at the end of the year was recorded in the accounting records at $17,800. Due to technological changes in the market, Garcia would be able to replace its inventory for $16,500. Required: 1. Using the lower of cost or market method, what amount should Garcia report for inventory on its balance sheet at the end of the year? 2. Prepare the journal entry required to value the inventory at the lower of cost or market.
Kulsrud Company would like to estimate the current inventory level. Using the gross profit method and the following information, estimate the current inventory level for Kulsrud Company. Goods available for sale 100,000 Net sales 150,000 Normal gross profit as a percent of sales 40%
Inventory Costing Methods Crandall Distributors uses a perpetual inventory system and has the following data available for inventory, purchases, and sales for a recent year. Required: 1. Compute the cost of ending inventory and the cost of goods sold using the specific identification method. Assume the ending inventory is made up of 40 units from beginning inventory, 30 units from Purchase 1, 80 units from Purchase 2, and 40 units from Purchase 3. 2. Compute the cost of ending inventory and cost of goods sold using the FIFO inventory costing method. 3. Compute the cost of ending inventory and cost of goods sold using the LIFO inventory costing method. 4. Compute the cost of ending inventory and cost of goods sold using the average cost inventory costing method. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.) 5. CONCEPTUAL CONNECTION Compare the ending inventory and cost of goods sold computed under all four methods. What can you conclude about the effects of the inventory costing methods on the balance sheet and the income statement?
Inventory Costing Methods On June 1, Welding Products Company had a beginning inventory of 210 cases of welding rods that had been purchased for S88 per case. Welding Products purchased 1,150 cases at a cost of $95 per case on June 3. On June 19, the company purchased another 950 cases at a cost of $112 per case. Sales data for the welding rods are: Welding Products uses a perpetual inventory system, and the sales price of the welding rods was $130 per case. Required: 1. Compute the cost of ending inventory and cost of goods sold using the FIFO method. 2. Compute the cost of ending inventory and cost of goods sold using the LIFO method. 3. Compute the cost of ending inventory and cost of goods sold using the average cost method. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.) 4. CONCEPTUAL CONNECTION Assume that operating expenses are $21,600 and Welding Products has a 30% tax rate. How much will the cash paid for income taxes differ among the three inventory methods? 5. CONCEPTUAL CONNECTION Compute Welding Products' gross profit ratio (rounded to two decimal places) and inventory turnover ratio (rounded to three decimal places) under each of the three inventory costing methods. How would the choice of inventory costing method affect these ratios?
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Calculate the cost of goods sold dollar value for A74 Company for the sale on March 11, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average (AVG).
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Reese Manufacturing Company manufactures and sells a limited line of products made to customer order. The company uses a perpetual inventory system and keeps its accounts on a calendar year basis. A 6-column spreadsheet is presented on page 1100. Additional information needed to prepare the income statement and schedule of cost of goods manufactured is as follows: REQUIRED 1. Prepare an income statement and schedule of cost of goods manufactured for the year ended December 31,20--. 2. Prepare a statement of retained earnings for the year ended December 31,20--. 3. Prepare a balance sheet as of December 31, 20--. 4. Prepare the adjusting, closing, and reversing entries.
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