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.
$$\begin{array} { | r | l | l | l | }
\hline \text { Date } & \text { Activities } & \text { Units Acquired at Cost } & \text { Units Sold at Retail } \
\hline \text { May 1 } & \begin{array} { l }
\text { Beginning } \
\text { Inventory }
\end{array} & 150 \text { units @ \$10.00 } & \
\hline 5 & \text { Purchase } & 220 \text { units @\$12.00 } & \
\hline 10 & \text { Sales } & & 140 \text { units @ \$20.00 } \
\hline 15 & \text { Purchase } & 100 \text { units @ \$13.00 } & \
\hline 24 & \text { Sales } & & 90 \text { units @ \$21.00 } \
\hline
\end{array}$$

Question

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

Quizplus · Accepted Answer

Using LIFO method, the ending inventory is assumed to consist of the latest (most recent) purchases. 
Therefore, the cost of the ending inventory = $500 + $660 + $620 = $2,780. 
Adding the 10% of the quantity purchased on August 15th (100 x $50 x 0.10 = $500), the cost assigned to ending inventory using LIFO is: $2,780 + $500 = $2,280.

Salmone Company Reported the Following Purchases and Sales of Its