Question

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

215

units

@ $10.60

=

$

2,279

Jan.

10

Sales

180

units

@ $40.60

Mar.

14

Purchase

320

units

@ $15.60

=

4,992

Mar.

15

Sales

260

units

@ $40.60

July

30

Purchase

415

units

@ $20.60

=

8,549

Oct.

5

Sales

400

units

@ $40.60

Oct.

26

Purchase

115

units

@ $25.60

=

2,944

Totals

1,065

units

$

18,764

840

units

Hemming uses a perpetual inventory system. Assume that ending inventory is made up of 40 units from the March 14 purchase, 70 units from the July 30 purchase, and all 115 units from the October 26 purchase. Using the specific identification method, calculate the following.

a) Cost of Goods Sold using Specific Identification
	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
Jan. 1	Beginning Inventory	215			$0.00	$0		$0.00	$0
Mar. 14	Purchase	320			$0.00	0		$0.00	0
July 30	Purchase	415			$0.00	0		$0.00	0
Oct. 26	Purchase	115			$0.00	0		$0.00	0
		1,065		0		$0	0		$0
b) Gross Margin using Specific Identification
Less:
Equals:

Answer 1