Hemming Co. reported the following current-year purchases and sales for its only product. Date Activities Uni…
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Question “Hemming Co. reported the following current-year purchases and sales for its only product. Date Activities Uni…”
Hemming Co. reported the following current-year purchases and
sales for its only product.
Perpetual FIFO: Goods Purchased Cost of Goods Sold Inventory Balance Cost Cost of Goods Sold # of Cost # of units Cost Inventory Balance # of units Date units sold per unit per unit per unit January 1 260 @ S 3,224.00 S12.40 $ 9,116.00 January 10 $42.40 S12.40 215 S17.40 S 12,40 March 14 420 S 17.40 March 15 July 30 October 5 October 26 Totals $ 9,116.00
Perpetual LIFO: Goods Purchased Cost of Goods Sold Inventory Balance # of Cost Cost # of units Cost Cost of Goods Inventory # of units Date Sold Balance units. per unit sold per unit per unit January 1 260 S12.40 S 3.224.00 January 10 March 14 March 15 July 30 October 5 October 26, Totals S 0.00
Compute the gross margin for FIFO method and LIFO method. FIFO: LIFO: Sales revenue Less: Cost of goods sold Gross margin Required 2 Required 3
a) Cost of Goods Sold using Specific Identification Cost of Goods Sold Available for Sale Ending Inventory Ending Ending Inventory Cost Unit Units Activity Unit Cost COGS Date Units Inventory Unit Cost Cost Sold Units Jan. 1 Beginning Inventory S 0.00 S 260 0 0.00 Purchase S 0.00 Mar. 14 420 0 0.00 July 30 S 0.00 Purchase 460 0.00 Oct. 26 Purchase S 16D S 0.00 0.00 1,300 0 b) Gross Margin using Specific Identification Less: Equals:
Answer
Correct Answer:
Requirement 1
Perpetual FIFO | |||||||||
Date | Goods Purchased | Cost of Goods Sold | Inventory Balance | ||||||
# of Units | Cost Per Unit | Cost of Goods Available for sale | # of Units Sold | Cost per Unit | Cost of Goods Sold | # of Units | Cost per Unit | Inventory Balance | |
01-Jan |
$ | 260 |
$ |
$ | |||||
10-Jan | 215 | $ 12.40 | $ 2,666.00 | 45 |
$ |
$ | |||
14-Mar | 420 |
$ | $ 7,308.00 | 45 |
$ |
$ | |||
420 |
$ |
$ | |||||||
15-Mar | 45 | $ 12.40 | $ | 85 |
$ |
$ | |||
335 | $ 17.40 | $ 5,829.00 | |||||||
30-Jul | 460 |
$ | $ 10,304.00 | 85 |
$ |
$ | |||
460 |
$ |
$ | |||||||
05-Oct | 85 | $ 17.40 | $ 1,479.00 | 120 |
$ |
$ | |||
340 | $ 22.40 | $ 7,616.00 | |||||||
26-Oct | 160 |
$ | $ 4,384.00 | 120 |
$ |
$ | |||
160 |
$ |
$ | |||||||
totals | |||||||||
1020 | $ 18,148.00 | 280 |
$ |
Requirement 2:
Perpetual LIFO | |||||||||
Date | Goods Purchased | Cost of Goods Sold | Inventory Balance | ||||||
# of Units | Cost Per Unit | Cost of Goods Available for sale | # of Units Sold | Cost per Unit | Cost of Goods Sold | # of Units | Cost per Unit | Inventory Balance | |
01-Jan |
$ | 260 |
$ |
$ | |||||
10-Jan | 215 |
$ | $ 2,666.00 | 45 | $ 12.40 | $ 558.00 | |||
14-Mar | 420 |
$ | $ 7,308.00 | 45 | $ 12.40 | $ 558.00 | |||
420 | $ 17.40 | $ 7,308.00 | |||||||
15-Mar | 380 |
$ | $ 6,612.00 | 45 | $ 12.40 | $ 558.00 | |||
40 | $ 17.40 | $ 696.00 | |||||||
30-Jul | 460 |
$ | $ 10,304.00 | 45 | $ 12.40 | $ 558.00 | |||
40 | $ 17.40 | $ 696.00 | |||||||
460 | $ 22.40 | $ 10,304.00 | |||||||
05-Oct | 425 |
$ | $ 9,520.00 | 45 | $ 12.40 | $ 558.00 | |||
40 | $ 17.40 | $ 696.00 | |||||||
35 | $ 22.40 | $ 784.00 | |||||||
26-Oct | 160 |
$ | $ 4,384.00 | 45 | $ 12.40 | $ 558.00 | |||
40 | $ 17.40 | $ 696.00 | |||||||
35 | $ 22.40 | $ 784.00 | |||||||
160 | $ 27.40 | $ 4,384.00 | |||||||
totals | 1020 | $strongTag3$nbsp; 18,798.00 | 280 | $strongTag5$nbsp; |
Requirement 3 : Gross Margin for FIFO and LIFO Method
FIFO | LIFO | |
sales revenue |
$ |
$ |
Less : Cost of Goods sold |
$ |
$ |
Gross Margin |
$ |
$ |
Working:
Sales Revenue | |||
date | units | selling price per unit | revenue |
10-Jan | 215 | 42.4 |
$ |
15-Mar | 380 | 42.4 | $ 16,112 |
05-Oct | 425 | 42.4 | $ 18,020 |
Total sales revenue | $ 43,248 |
Requirement 4:
Cost of Goods sold using specific | |||||||||
Available for sale | Cost of Goods Sold | Ending Inventory | |||||||
Date | Activity | units | unit cost | units sold | unit cost | COGS | Ending Inventory Units | unit cost | Ending inventory cost |
01-Jan | Beginning Inventory | 260 | $ 12.40 | 260 | $ 12.40 | $ 3,224.00 | 0 | $ 12.40 |
$ |
14-Mar | Purchase | 420 | $ 17.40 | 375 | $ 17.40 | $ 6,525.00 | 45 | $ 17.40 |
$ |
30-Jul | Purchase | 460 | $ 22.40 | 385 | $ 22.40 | $ 8,624.00 | 75 | $ 22.40 |
$ |
26-Oct | Purchase | 160 | $ 27.40 | 0 | $ 27.40 |
$ | 160 | $ 27.40 |
$ |
Total | 1300 | 1020 | $ 18,373.00 | 280 |
$ |
Gross Margin using special | ||
Total Revenue |
$ | |
Less | Cost of Goods sold |
$ |
Equals | Gross Margin |
|
End of Answer.
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