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Required information Skip to question   [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    Compute the gross margin for LIFO method. Sales revenue Less: Cost of goods sold  Gross margin

Required information Skip to question   [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    Compute the gross margin for LIFO method. Sales revenue Less: Cost of goods sold  Gross margin

Cornerstones of Financial Accounting
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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Required information

Skip to question

 

[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 

 

Compute the gross margin for LIFO method.

Sales revenue

Less: Cost of goods sold 

Gross margin

 

 

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