Question

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

Date	Activities	Units Acquired at Cost	Units Sold at Retail
May 1	Beginning Inventory	310 units @ $16
5	Purchase	300 units @ $18
10	Sales		220 units @ $26
15	Purchase	180 units @ $19
24	Sales		170 units @ $27
A)$5,174 B)$4,860 C)$10,100 D)$7,880 E)$6,580 Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to ending inventory using LIFO. Date Activities Units Acquired at Cost Units Sold at Retail May 1 Beginning Inventory 260 units @ $11 5 Purchase 275 units @ $13 10 Sales 195 units @ $21 15 Purchase 155 units @ $14 24 Sales 145 units @ $22 A)$3,900 B)$4,340 C)$4,040 D)$4,705 E)$8,605 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 160 units @ $11 5 Purchase 225 units @ $13 10 Sales 145 units @ $21 15 Purchase 105 units @ $14 24 Sales 95 units @ $22 A)$6,155 B)$3,215 C)$2,800 D)$3,355 E)$2,940

Answer 1

• Answer #1
  Ending Inventory = 310 + 300 – 220 + 180 – 170 = 400 units
  Cost assigned to ending inventory:
  310 units x $ 16 = 4960
  90 units x $ 18 = 1620
  Total Cost for 310 + 90 = 400 units = 4960 + 1620 = $ 6,580
  Correct Answer = Option ‘E’ $ 6,580
• Answer #2

Ending Inventory = 260 + 275 + 155 – 195 – 145 = 350 units
Cost assigned to ending inventory = ((155 - 145 units x $ 14) + (275 – 195 unitx) x $13 + 260 units x 11)
= 140 + 1040 + 2860
= $ 4,040
Correct Answer = Option ‘C’ $ 4,040

• Answer #3

Correct Answer = Option ‘C’ $ 2,800 = Cost of Goods Sold as per FIFO

FIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	160	$                11.00	$                        1,760.00	160	$         11.00	$           1,760.00	0	$        11.00	$                         -
Purchases:
5 mar	225	$                13.00	$                        2,925.00	80	$         13.00	$           1,040.00	145	$        13.00	$            1,885.00
15 Mar	105	$                14.00	$                        1,470.00	0	$         14.00	$                        -	105	$        14.00	$            1,470.00
TOTAL	490		$                        6,155.00	240		$           2,800.00 = Answer	250		$            3,355.00