Salmone Company reported the following purchases and sales of its only product.Salmone uses a periodic inventory system.Determine the cost assigned to the ending inventory using FIFO.
$$\begin{array} { | c | l | l | l | }
\hline \text { Date } & { \text { Activities } } & \text { Units Acquired at Cost } & \text { Units Sold at Retail } \
\hline \text { May 1}& \text { Beginning Inventory } & 150 \text { units @ } \$ 10.00 & \
\hline 5& \text { Purchase } & 220 \text { units @ } \$ 12.00 & \
\hline 10& \text { Sales } & & 140 \text { units @ \$20.00 } \
\hline 15& \text { Purchase } & 100 \text { units @ } \$ 13.00 & \
\hline 24& \text { Sales } & & 90 \text { units @ \$21.00 } \
\hline
\end{array}$$

Question

Salmone Company reported the following purchases and sales of its only product.Salmone uses a periodic inventory system.Determine the cost assigned to the ending inventory using FIFO.
$$\begin{array} { | c | l | l | l | } 
\hline \text { Date } & { \text { Activities } } & \text { Units Acquired at Cost } & \text { Units Sold at Retail } \
\hline \text { May 1}& \text { Beginning Inventory } & 150 \text { units @ } \$ 10.00 & \
\hline 5& \text { Purchase } & 220 \text { units @ } \$ 12.00 & \
\hline 10& \text { Sales } & & 140 \text { units @ \$20.00 } \
\hline 15& \text { Purchase } & 100 \text { units @ } \$ 13.00 & \
\hline 24& \text { Sales } & & 90 \text { units @ \$21.00 } \
\hline
\end{array}$$

Quizplus · Accepted Answer

FIFO (First-In, First-Out) assumes that the first units purchased are the first units sold. Therefore, the ending inventory consists of the units purchased on May 5 and May 15. The cost of the ending inventory is calculated as follows:Units from May 5 purchase: 220 units @ $12.00 = $2,640Units from May 15 purchase: 100 units @ $13.00 = $1,300Total cost of ending inventory: $2,640 + $1,300 = $3,940

Salmone Company Reported the Following Purchases and Sales of Its