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

Question:

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

Date Activities Units Acquired at Cost Units Sold at Retail
Jan. 1 Beginning inventory 120 units at $10.80 = $ 1,296
Jan. 10 Sales 110 units at $40.80
Mar. 14 Purchase 270 units at $15.80 = 4,266
Mar. 15 Sales 160 units at $40.80
July 30 Purchase 420 units at $20.80 = 8,736
Oct. 5 Sales 280 units at $40.80
Oct. 26 Purchase 620 units at $25.80 = 15,996
Totals 1,430 units at $ 30,294 550 units

Hemming uses a periodic inventory system. Compute the gross margin using LIFO.

Inventory:

An inventory refers to the current asset of an organization that is controlled and managed by the business in order to create a path for efficient operations. In other words, it is the source which is used for sale throughout a particular period.

Answer and Explanation: 1

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Computation of gross margin:

Particulars Amount
Total units 1,430
Number of units sold 550
Sales price $40.80
Total sales $22,440
Less:...

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Calculating Beginning Inventory: Formula & Explanation

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Chapter 1 / Lesson 7
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Learn the definition of beginning inventory and understand how to calculate it. Find the beginning inventory formula and discover various examples of its usage.


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