Date January 1 January 10 March 14 March 15 July 30 October 5 October 26 Activities Beginning inventory Sales Purchase Sales Purchase Sales Purchase Totals Required: Hemming uses a perpetual inventory system. Units Acquired at Cost @ $10 200 units 350 units 450 units 100 units 1,100 units @$15 = @ $20 = @$25 = $ 2,000 5,250 9,000 2,500 $ 18,750 1. Determine the costs assigned to ending inventory and to cost of goods sold using FIFO. 2. Determine the costs assigned to ending inventory and to cost of goods sold using LIFO. 3. Compute the gross profit for FIFO method and LIFO method. Units Sold at Retail 150 units 300 units 430 units 880 units @$40 @ $40 @ $40

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in…