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.
$$\begin{array} { | r | l | l | l | }
\hline \text { Date } & \text { Activities } & \text { Units Acquired at Cast } & \text { Units Sold at Ret ail } \
\hline \text { May 1 } & \text { Beginning Inventory } & 150 \text { units @ \$10.00 } & \
\hline 5 & \text { Purchase } & 220 \text { units @ @ } \$ 12.00 & \
\hline 10 & \text { Sales } & & 140 \text { units @ \$20.00 } \
\hline 15 & \text { Pur chase } & 100 \text { units @ \$13.00 } & \
\hline 24 & \text { Sales } & & 90 \text { units @ \$21.00 } \
\hline
\end{array}$$
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.
$$\begin{array} { | r | l | l | l | } 
\hline \text { Date } & \text { Activities } & \text { Units Acquired at Cast } & \text { Units Sold at Ret ail } \
\hline \text { May 1 } & \text { Beginning Inventory } & 150 \text { units @ \$10.00 } & \
\hline 5 & \text { Purchase } & 220 \text { units @ @ } \$ 12.00 & \
\hline 10 & \text { Sales } & & 140 \text { units @ \$20.00 } \
\hline 15 & \text { Pur chase } & 100 \text { units @ \$13.00 } & \
\hline 24 & \text { Sales } & & 90 \text { units @ \$21.00 } \
\hline
\end{array}$$
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 x $12 = $1,680). For the sale on May 24, 90 units are sold from the May 15 purchase (90 units x $13 = $1,170). Total cost of goods sold is $1,680 + $1,170 = $2,850.

Salmone Company Reported the Following Purchases and Sales for Its