Salmone Company reported the following purchases and sales for its only product.
ID: 2575816 • Letter: S
Question
Salmone Company reported the following purchases and sales for its only product. Salmone uses a periodic inventory system. Determine the cost assigned to cost of goods sold using LIFO.
Date
Activities
Units Acquired at Cost
Units Sold at Retail
May 1
Beginning Inventory
350 units @ $20
5
Purchase
320 units @ $22
10
Sales
240 units @ $30
15
Purchase
200 units @ $23
24
Sales
190 units @ $31
Date
Activities
Units Acquired at Cost
Units Sold at Retail
May 1
Beginning Inventory
350 units @ $20
5
Purchase
320 units @ $22
10
Sales
240 units @ $30
15
Purchase
200 units @ $23
24
Sales
190 units @ $31
Explanation / Answer
Under the LIFO system, items sold are taken from the latest inventory
So, cost of May 24 sales = 190 * 23 = 4370
Cost of May 10 sales = 10 * 23 + 230 * 22 = 5290
Cost of goods sold = 4370 + 5290 = 9660
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