The following information applies to the questions displayed

The following information applies to the questions displayed below.]

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

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

Hemming Co. reported the following current-year purchases and sales data for its only product.

Solution

FIFO method Date Activities Units Acquired at Cost Units Sold at Retail Balance units   $ cl inven. Jan. 1 Beginning inventory 105 units @ $10.20 = $ 1,071 105 10.20 1071 1071 Jan. 10 Sales 95 units @ $40.20 10 10.20 102 102 Mar. 14 Purchase 255 units @ $15.20 = 3,876 10 10.20 102 255 15.20 3,876 3,978 Mar. 15 Sales 145 units @ $40.20 120 15.20 1824 1824 July 30 Purchase 405 units @ $20.20 = 8,181 120 15.20 1824 405 20.20 8181 10005 Oct. 5 Sales 295 units @ $40.20 230 20.20 4646 4646 Oct. 26 Purchase 605 units @ $25.20 = 15,246 230 20.20 4646 605 25.20 15246 19892     Totals 1,370 units $ 28,374 535 units Under closing inventory balance as per Fifo = 835 units @ 19892. Good are moving in strictly chronological order. LIFO method Date Activities Units Acquired at Cost Units Sold at Retail Balance units   $ cl inven. Jan. 1 Beginning inventory 105 units @ $10.20 = $ 1,071 105 10.20 1071 1071 Jan. 10 Sales 95 units @ $40.20 10 10.20 102 102 Mar. 14 Purchase 255 units @ $15.20 = 3,876 10 10.20 102 255 15.20 3,876 3,978 Mar. 15 Sales 145 units @ $40.20 10 10.20 102 110 15.20 1672 1774 July 30 Purchase 405 units @ $20.20 = 8,181 10 10.20 102 110 15.20 1672 405 20.20 8181 9955 Oct. 5 Sales 295 units @ $40.20 10 10.20 102 110 15.20 1672 110 20.20 2222 3996 Oct. 26 Purchase 605 units @ $25.20 = 15,246 10 10.20 102 110 15.20 1672     Totals 1,370 units $ 28,374 535 units 110 20.20 2222 605 25.20 15246 19242 Under closing inventory balance as per Lifo = 835 units @ 19242. Good are moving last purchase first out method No of good will be the same in both but only valuation differs. Gross margin Fifo Lifo Opening stock 1071 Purchases 27303 28374 28374 28374 Sales 535@40.20 21507 21507 21507 Closing stock 19892 19242 Total 41399 40749 Gross profit 13025 12375