required information\nuse the following information for the exercises 8 - 10 below. (algo)\nthe following…

required information\nuse the following information for the exercises 8 - 10 below. (algo)\nthe following information applies to the questions displayed below.\nhemming company reported the following current - year purchases and sales for its only product.\ndate activities units acquired at cost units sold at retail\njanuary 1 beginning inventory 265 units @ $12.60 = $3,339\njanuary 10 sales 225 units @ $42.00\nmarch 14 purchase 430 units @ $17.60 = 7,568\nmarch 15 sales 370 units @ $42.60\njuly 30 purchase 465 units @ $22.60 = 10,509\noctober 5 sales 440 units @ $42.60\noctober 26 purchase 165 units @ $27.60 = 4,554\ntotals 1,325 units $25,970 1,035 units\nexercise 5 - 8 (algo) periodic: inventory costing lo p1\nhemming uses a periodic inventory system\n(a) determine the costs assigned to ending inventory and to cost of goods sold using fifo\n(b) determine the costs assigned to ending inventory and to cost of goods sold using lifo\n(c) compute the gross profit for each method\n(a) periodic fifo\ncost of goods available for sale cost of goods sold ending inventory\n# of units cost per unit cost of goods available for sale # of units sold cost per unit cost of goods sold # of units in ending inventory cost per unit ending inventory\nbeginning inventory 265 $12.60 $3,339\npurchases\nmarch 14 430 $17.60 7,568\njuly 30 465 $22.60 10,509\noctober 26 165 $27.60 4,554\ntotal 1,325 $25,970 0 $0 0 $0

required information\nuse the following information for the exercises 8 - 10 below. (algo)\nthe following information applies to the questions displayed below.\nhemming company reported the following current - year purchases and sales for its only product.\ndate activities units acquired at cost units sold at retail\njanuary 1 beginning inventory 265 units @ $12.60 = $3,339\njanuary 10 sales 225 units @ $42.00\nmarch 14 purchase 430 units @ $17.60 = 7,568\nmarch 15 sales 370 units @ $42.60\njuly 30 purchase 465 units @ $22.60 = 10,509\noctober 5 sales 440 units @ $42.60\noctober 26 purchase 165 units @ $27.60 = 4,554\ntotals 1,325 units $25,970 1,035 units\nexercise 5 - 8 (algo) periodic: inventory costing lo p1\nhemming uses a periodic inventory system\n(a) determine the costs assigned to ending inventory and to cost of goods sold using fifo\n(b) determine the costs assigned to ending inventory and to cost of goods sold using lifo\n(c) compute the gross profit for each method\n(a) periodic fifo\ncost of goods available for sale cost of goods sold ending inventory\n# of units cost per unit cost of goods available for sale # of units sold cost per unit cost of goods sold # of units in ending inventory cost per unit ending inventory\nbeginning inventory 265 $12.60 $3,339\npurchases\nmarch 14 430 $17.60 7,568\njuly 30 465 $22.60 10,509\noctober 26 165 $27.60 4,554\ntotal 1,325 $25,970 0 $0 0 $0

Answer

Explanation:

Step1: Calculate units in ending inventory

Total units available for sale = 1325 units. Total units sold = 1035 units. Ending - inventory units = 1325 - 1035 = 290 units.

Step2: FIFO (First - In, First - Out)

Cost of Goods Sold:

Starting with the oldest inventory.

  • Use all 265 units from beginning inventory at $12.60 per unit. Cost = 265×$12.60=$3339.
  • Remaining units to account for in cost of goods sold: 1035 - 265 = 770 units.
  • Use 430 units from March 14 purchase at $17.60 per unit. Cost = 430×$17.60 = $7568.
  • Remaining units: 770 - 430 = 340 units.
  • Use 340 units from July 30 purchase at $22.60 per unit. Cost = 340×$22.60=$7684.
  • Total cost of goods sold = $3339 + $7568+ $7684 = $18591.

Ending Inventory:

Ending inventory units = 290 units.

  • 465 - 340 = 125 units left from July 30 purchase. Use 125 units at $22.60 per unit. Cost = 125×$22.60 = $2825.
  • Use 165 units from October 26 purchase at $27.60 per unit. Cost = 165×$27.60=$4554.
  • Total ending - inventory cost = $2825 + $4554 = $7379.

Step3: LIFO (Last - In, First - Out)

Cost of Goods Sold:

Starting with the newest inventory.

  • Use 165 units from October 26 purchase at $27.60 per unit. Cost = 165×$27.60 = $4554.
  • Use 440 units from July 30 purchase at $22.60 per unit. Cost = 440×$22.60=$9944.
  • Use 370 units from March 14 purchase at $17.60 per unit. Cost = 370×$17.60 = $6512.
  • Use 60 units from beginning inventory at $12.60 per unit. Cost = 60×$12.60=$756.
  • Total cost of goods sold = $4554+ $9944 + $6512+ $756 = $21766.

Ending Inventory:

Ending inventory units = 290 units.

  • 265 - 60 = 205 units left from beginning inventory. Cost = 205×$12.60 = $2583.
  • Use 85 units from March 14 purchase at $17.60 per unit. Cost = 85×$17.60=$1496.
  • Total ending - inventory cost = $2583 + $1496 = $4079.

Step4: Gross Profit

FIFO:

Sales revenue = (225 + 370+ 440)×$42.60=(1035)×$42.60 = $44091. Gross profit = Sales revenue - Cost of goods sold = $44091 - $18591 = $25500.

LIFO:

Sales revenue = $44091. Gross profit = Sales revenue - Cost of goods sold = $44091 - $21766 = $22325.

Answer:

(a) FIFO: Cost of Goods Sold = $18591, Ending Inventory = $7379. (b) LIFO: Cost of Goods Sold = $21766, Ending Inventory = $4079. (c) FIFO Gross Profit = $25500, LIFO Gross Profit = $22325.