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
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.
