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

Question

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

Quizplus · Accepted Answer

Using LIFO (Last-In-First-Out), we assume that the last units purchased are the first to be sold, and the cost of the beginning inventory is assigned to the ending inventory.

The cost of goods sold can be calculated as:

400 x $5 + 300 x $6 + 200 x $7 = $3,500

To determine the cost of ending inventory, we start from the most recent purchases and work our way back:

Ending inventory = 50 x $7 + 100 x $6 + 50 x $5 = $820

Therefore, the cost assigned to ending inventory using LIFO is $820.

The closest option is C) $2,580.

Salmone Company Reported the Following Purchases and Sales of Its