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denpristay
26 days ago
6

Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Deter

mine the cost assigned to ending inventory using LIFO.
Business
1 answer:
harina [3.1K]26 days ago
7 0

Date Activities Units Acquired at Cost Units Sold at Retail

May 1 Beginning Inventory 150 units at $10.00  

5 Purchase 220 units at $12.00  

10 Sales  140 units at $20.00

15 Purchase 100 units at $13.00  

24 Sales  90 units at $21.0

Answer:

Closing inventory value = $1290

Explanation:

In the LIFO inventory system, inventory units are valued utilizing the prices from the most recent purchase, and this continues sequentially.

The value of the closing inventory = Total cost of available inventory for sale - total cost of goods sold

The cost of inventory sold is calculated as follows:

140 units:140 × $12=1,680

90 units: 90× $13 = 1,170

Total cost of goods sold = 1,680 + 1,170 = 2,850

Total cost of inventory available for sale is equal to:

(150  × $10.00) +  (220  ×$12.00) = 4,140

Value of closing inventory = Total cost of available inventory for sale - total cost of goods sold

4,140  - 2,850 = $1290

Closing inventory value = $1290

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