Salmone Company reported the following purchases and sales for its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to cost of goods sold using LIFO.
$$\begin{array} { | r | l | l | l | }
\hline \multicolumn{1}{|c|} { \text { Date } } & \text { Activities } & \text { Units Acquired at Cost } & \text { Units Sold at Retail } \
\hline \text { May 1 } & \text { Beginning Inventory } & 150 \text { units } @ \$ 10.00 & \
\hline 5 & \text { Purchase } & 220 \text { units } @ \$ 12.00 & \
\hline 10 & \text { Sales } & & 140 \text { units } @ \$ 20.00 \
\hline 15 & \text { Purchase } & 100 \text { units } @ \$ 13.00 & \
\hline 24 & \text { Sales } & & 90 \text { units } @ \$ 21.00 \
\hline
\end{array}$$
A)$2,980
B)$2,590
C)$2,850
D)$2,860
E)$2,460

Question

Salmone Company reported the following purchases and sales for its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to cost of goods sold using LIFO.
$$\begin{array} { | r | l | l | l | } 
\hline \multicolumn{1}{|c|} { \text { Date } } & \text { Activities } & \text { Units Acquired at Cost } & \text { Units Sold at Retail } \
\hline \text { May 1 } & \text { Beginning Inventory } & 150 \text { units } @ \$ 10.00 & \
\hline 5 & \text { Purchase } & 220 \text { units } @ \$ 12.00 & \
\hline 10 & \text { Sales } & & 140 \text { units } @ \$ 20.00 \
\hline 15 & \text { Purchase } & 100 \text { units } @ \$ 13.00 & \
\hline 24 & \text { Sales } & & 90 \text { units } @ \$ 21.00 \
\hline
\end{array}$$
A)$2,980
B)$2,590
C)$2,850
D)$2,860
E)$2,460

Quizplus · Accepted Answer

Under LIFO, the last items purchased are the first to be sold. For the sale on May 10, 140 units are sold from the May 5 purchase (140 units @ $12 = $1,680). For the sale on May 24, 90 units are sold from the May 15 purchase (90 units @ $13 = $1,170). Total cost of goods sold = $1,680 + $1,170 = $2,850.

Salmone Company Reported the Following Purchases and Sales for Its