Question

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

Date	Activities	Units Acquired at Cost	Units Sold at Retail
May 1	Beginning Inventory	150 units @ $10.00
5	Purchase	220 units @ $12.00
10	Sales		140 units @ $20.00
15	Purchase	100 units @ $13.00
24	Sales		90 units @ $21.00

Multiple Choice

• $2,980

• $2,460

• $2,850

• $2,590

• $5,440

Answer 1

Answer:

Cost of Goods sold

$ 2,460.00

Workings:

			Purchase				Cost of Goods Sold				Inventory
Date	Particulars		Units	Rate	Amount		Units	Rate	Amount		Units	Rate	Amount
01-May	Beginning Inventory										150	$    10.00	$ 1,500.00
05-May	Purchase		220	$    12.00	$ 2,640.00						150	$    10.00	$ 1,500.00
											220	$    12.00	$ 2,640.00
10-May	Sales						140	$    10.00	$ 1,400.00		10	$    10.00	$    100.00
											220	$    12.00	$ 2,640.00
15-May	Purchase		100	$    13.00	$ 1,300.00						10	$    10.00	$    100.00
											220	$    12.00	$ 2,640.00
											100	$    13.00	$ 1,300.00
24-May	Sales						10	$    10.00	$    100.00		140	$    12.00	$ 1,680.00
							80	$    12.00	$    960.00		100	$    13.00	$ 1,300.00
Total					$3,940.00				$2,460.00				$2,980.00