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

Using the FIFO method, we assume that the first items purchased are the first ones sold, and any remaining items are from the most recent purchases.
First, we need to calculate the cost of goods sold (COGS) by adding up the costs of the items sold:
(40 x $30) + (70 x $32) + (80 x $33) = $4,960
Next, we need to determine the cost of the ending inventory. We start with the most recent purchases:
(40 x $35) + (20 x $36) = $1,460
Then, we move on to the earlier purchases:
(40 x $33) + (70 x $32) = $2,520
We add up the cost of the most recent purchases and the earliest purchases to get the total cost of the ending inventory:
$1,460 + $2,520 = $2,980. Therefore, the correct answer is C) $2,980.

Salmone Company Reported the Following Purchases and Sales of Its