Question

[The following information applies to the questions displayed below.] 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 300 units @ $14.00 = $ 4,200 Jan. 10 Sales 250 units @ $44.00 Mar. 14 Purchase 520 units @ $19.00 = 9,880 Mar. 15 Sales 460 units @ $44.00 July 30 Purchase 500 units @ $24.00 = 12,000 Oct. 5 Sales 480 units @ $44.00 Oct. 26 Purchase 200 units @ $29.00 = 5,800 Totals 1,520 units $ 31,880 1,190 units Required: Hemming uses a perpetual inventory system. Assume that ending inventory is made up of 50 units from the March 14 purchase, 80 units from the July 30 purchase, and all 200 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	300			$0.00	$0		$0.00	$0
Mar. 14	Purchase	520			$0.00	0		$0.00	0
July 30	Purchase	500			$0.00	0		$0.00	0
Oct. 26	Purchase	200			$0.00	0		$0.00	0
		1,520		0		$0	0		$0
b) Gross Margin using Specific Identification
Less:
Equals:

Answer 1

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 300 14 300 14 4200 Mar. 14 Purchase 520 19 470 19 8930 50 19 950 July 30 Purchase 500 24 420 24 10080 80 24 1920 Oct. 26 Purchase 200 29 200 29 5800 1,520 1190 23210 330 8670 b) Gross Margin using Specific Identification Sales (1190*44) 52360 Less: Cost of goods sold -23210 Equal Gross profit 29150