Salmone Company reported the following purchases and sales of its only product.
ID: 2575785 • Letter: S
Question
Salmone Company reported the following purchases and sales of its only product. Salmone uses a periodic inventory system. Determine the cost assigned to cost of goods sold using FIFO.
Date
Activities
Units Acquired at Cost
Units Sold at Retail
May 1
Beginning Inventory
350 units @ $20
5
Purchase
320 units @ $22
10
Sales
240 units @ $30
15
Purchase
200 units @ $23
24
Sales
190 units @ $31
Date
Activities
Units Acquired at Cost
Units Sold at Retail
May 1
Beginning Inventory
350 units @ $20
5
Purchase
320 units @ $22
10
Sales
240 units @ $30
15
Purchase
200 units @ $23
24
Sales
190 units @ $31
Explanation / Answer
total sale units = 240 units + 190 units =>430 units.
as per FIFO policy , the items which are first purchased will be sold off first.
accordingly out of 430 units sold.
350 units will be from beginning inventory @$20 =>350 * $20 =>$7,000
remaining units = (430 - 350units) =>80 units from may 5 puchase =>80 units * $22 =>$1,760.
total cost of goods sold =>$7,000 + 1760 =>$8,760.
350 units from beginning inventory ($20 * 350) $7,000 80 units from may 5 purchase ($22*80) $1,760 cost of goods sold using FIFO $8,760Related Questions
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