Required information Use the following information for the Exercises below. [The
ID: 2437496 • Letter: R
Question
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.
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:
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.
Date Activities Units Acquired at Cost Units Sold at Retail Jan. 1 Beginning inventory 220 units @ $10.80 = $ 2,376 Jan. 10 Sales 190 units @ $40.80 Mar. 14 Purchase 330 units @ $15.80 = 5,214 Mar. 15 Sales 280 units @ $40.80 July 30 Purchase 420 units @ $20.80 = 8,736 Oct. 5 Sales 390 units @ $40.80 Oct. 26 Purchase 120 units @ $25.80 = 3,096 Totals 1,090 units $ 19,422 860 unitsExplanation / Answer
Cost of goods available for sale Cost of goods sold - Periodic FIFO Ending Inventory - Periodic FIFO FIFO # of units (A) Cost per unit Cost of goods available for sale # of units sold (B) Cost per unit Cost of goods sold # of units in ending inventory (A) - (B) Cost per unit Ending Inventory Beginning Inventory 220 $ 10.80 $ 2,376 220 $ 10.80 $ 2,376 0 $ 10.80 $0 Purchases: Mar-14 330 $ 15.80 $ 5,214 330 $ 15.80 $ 5,214 0 $ 15.80 $0 Jul-30 420 $ 20.80 $ 8,736 310 $ 20.80 $ 6,448 110 $ 20.80 $ 2,288 Oct-26 120 $ 25.80 $ 3,096 $ 25.80 $ - 120 $ 25.80 $ 3,096 1,090 $ 19,422 860 $ 14,038 230 $ 5,384 Cost of goods available for sale Cost of goods sold - Periodic LIFO Ending Inventory - Periodic LIFO LIFO # of units (A) Cost per unit Cost of goods available for sale # of units sold (B) Cost per unit Cost of goods sold # of units in ending inventory (A) - (B) Cost per unit Ending Inventory Beginning Inventory 220 $ 10.80 $ 2,376 0 $ 10.80 $0 220 $ 10.80 $ 2,376 Purchases: Mar-14 330 $ 15.80 $ 5,214 320 $ 15.80 $ 5,056 10 $ 15.80 $ 158 Jul-30 420 $ 20.80 $ 8,736 420 $ 20.80 $ 8,736 0 $ 20.80 $0 Oct-26 120 $ 25.80 $ 3,096 120 $ 25.80 $ 3,096 0 $ 25.80 $0 1,090 $ 19,422 860 $ 13,792 230 $ 2,534 Gross Margin = Sales Revenue - Cost of goods sold Sales Revenue = 860 X $40.80 = $ 35,088 Under FIFO Gross Margin = Sales Revenue - Cost of goods sold = $ 35,088 - $ 14,038 = $ 21,050 Under LIFO Gross Margin = Sales Revenue - Cost of goods sold = $ 35,088 - $ 13,792 = $ 21,296
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.