PLEASE ONLY ANSWER QUESTION 2. THANK YOU. 1. HEMI has a perpetual inventory...
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PLEASE ONLY ANSWER QUESTION 2. THANK YOU.
1. HEMI has a perpetual inventory system with purchases and sales being recorded by its computerized inventory system using the weighted average cost method. HEMI has purchased and placed heavy equipment transmissions at Suncor in Fort McMurray on consignment. Syncor benefits from having the spare part readily available and HEMI saves on storage costs. Accountant has been asked by HEMI's management to provide a profitability report for the consignment arrangement with Suncor. The Accountant extracted the sales ($20,500,000) and cost of sales ($18,504,180) numbers from HEMI's accounting system. The Accountant wants you to: a. Compute the gross profit using the first-in-first out (FIFO) method of costing inventory and the following purchase and sale information (show your calculations): 2. HEMI's management is cost conscious and does not spend money unless the benefits exceed the amount spent. Accountant understands that physical inventory count is good internal control practice; however, he wants you to explain the benefit of a physical inventory count when HEMI has a perpetual inventory system and the inventory is physically protected
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