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.
$$\begin{array} { | c | l | l | l | }
\hline \text { Date } & { \text { Activities } } & \text { Units Acquired at Cost } & \text { Units Sold at Retail } \
\hline \text { May 1 } & \text { Beginning Inventory } & 150 \text { units @ } \$ 10.00 & \
\hline5& \text { Purchase } & 220 \text { units @ } \$ 12.00 & \
\hline 10& \text { Sales } & & 140 \text { units @ } \$ 20.00 \
\hline 15 &\text { Purchase } & 100 \text { units @ } \$ 13.00 & \
\hline 24&\text {Sales } & & 90 \text { units @ } \$ 21.00 \
\hline
\end{array}$$

Question

Salmone Company reported the following purchases and sales for its only product.Salmone uses a perpetual inventory system.Determine the cost assigned to cost of goods sold using LIFO.
$$\begin{array} { | c | l | l | l | } 
\hline \text { Date } & { \text { Activities } } & \text { Units Acquired at Cost } & \text { Units Sold at Retail } \
\hline \text { May 1 } & \text { Beginning Inventory } & 150 \text { units @ } \$ 10.00 & \
\hline5& \text { Purchase } & 220 \text { units @ } \$ 12.00 & \
\hline 10& \text { Sales } & & 140 \text { units @ } \$ 20.00 \
\hline 15 &\text { Purchase } & 100 \text { units @ } \$ 13.00 & \
\hline 24&\text {Sales } & & 90 \text { units @ } \$ 21.00 \
\hline
\end{array}$$

Quizplus · Accepted Answer

Under LIFO (Last-In, First-Out), the most recent purchases are sold first. For the first sale of 140 units: 100 units @ $13 (from May 15 purchase) + 40 units @ $12 (from May 5 purchase) = $1,300 + $480 = $1,780. For the second sale of 90 units: 180 units remaining from May 5 purchase (220 units - 40 units sold) and 150 units from May 1 inventory, so 90 units @ $12 (from the remaining May 5 purchase) = $1,080. Total COGS = $1,780 (first sale) + $1,080 (second sale) = $2,860.

Salmone Company Reported the Following Purchases and Sales for Its