Question

Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to the ending inventory using FIFO.

Date	Activities	Units Acquired at Cost	Units Sold at Retail
May 1	Beginning Inventory	210 units @ $16
5	Purchase	250 units @ $18
10	Sales		170 units @ $26
15	Purchase	130 units @ $19
24	Sales		120 units @ $27

What is the correct answer?

Multiple Choice

• $5,530

• $4,800

• $5,340

• $4,990

• $5,440

Answer 1

Correct Answer:

Option: A: Ending inventory = $ 5,530

Cost of Goods Available for sale
	Units	Cost per unit	value
Beginning Inventory	210	$                    16	$                     3,360
Purchases	250	$                    18	$                     4,500
Purchases	130	$              19.00	$                     2,470
Total	590		$                  10,330

	FIFO
A	Total Units Available for sale			590			$                    10,330
	Units Sold			290
	Ending Inventory Units			300
	Valuation
	Cost of Goods Sold		210		$                     16.00		$                      3,360
			80		$                     18.00		$                      1,440
B	Cost of Goods Sold		290	units			$                      4,800
A-B	Ending Inventory		300	units			$                      5,530

End of Answer.

Thanks