Hemming Co. reported the following current year purchases and sales for its one product. (This is all a question)

Date

Activities

Units Acquired at Cost

Retail Units

Ene.

1

Initial inventory

250

units

@ $12.00

=

ps

3,000

Ene.

10

Sales

200

units

@ $42.00

Mar.

14

Purchase

400

units

@ $17.00

=

6,800

Mar.

15

Sales

360

units

@ $42.00

Julio

30

Purchase

450

units

@ $22.00

=

9,900

Oct.

5

Sales

420

units

@ $42.00

Oct.

26

Purchase

150

units

@ $27.00

=

4,050

Totals

1,250

units

ps

23,750

980

units

Required :
Hemming uses a perpetual inventory system.

1. Determine costs allocated to ending inventory and cost of goods sold using FIFO.
2. Determine costs allocated to ending inventory and cost of goods sold using LIFO.
3. Calculate the gross margin for the FIFO method and the LIFO method.

Determine the costs allocated to ending inventory and cost of goods sold using FIFO.

FIFO perpetual:
	purchased goods			cost of goods sold					inventory balance
Date	# of units		Cost per unit	# of units sold		Cost per unit	cost of goods sold		# of units		Cost per unit	inventory balance
January 1st									250	@	$12.00	=	$3,000.00
January 10				200	@	$42.00	=	$8,400.00	50	@	$12.00	=	$600.00
March 14	400.00	@	$17.00						50	@	$12.00	=	$600.00
									350.	@	$17.00	=	5,950.00
													$6,550.00
March, 15th				50	@	$12.00	=	$600.00	0	@	$12.00	=
				310	@	$17.00	=	5,270.00	40	@	$17.00	=	$680.00
								$5,870.00					$680.00
July 30	450	@	$22.00						0	@	$12.00
									40	@	$17.00	=	680.00
									450.	@	$22.00	=	9,900.00
													$10,580.00
October 5th				0	@	$12.00	=	$0.00	0	@	$12.00
				40	@	$17.00	=	680.00	0	@	$17.00
				380	@	$22.00	=	8,360.00	70	@	$22.00	=	1,540.00
								$9,040.00					$1,540.00
October 26th	150	@	$27.00						0	@	$12.00
									0	@	$17.00
									70	@	$22.00	=	1,540.00
									150	@	$27.00	=	4,050.00
Totals								$23,310.00					$5,590.00

Determine the costs allocated to ending inventory and cost of goods sold using LIFO.

Calculate the gross margin for the FIFO method and the LIFO method.

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