Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventorysystem. Determine the cost assigned to the ending inventory using FIFO.DateActivitiesUnits Acquired at Cost Units Sold at RetailMay 1 Beginning inventory 190 units @ $10 = $1,900May 5Purchase260 units @ $12 = $3,120May 10 Sales180 units @ $20May 15 Purchase140 units @ $13 = $1,820May 24 Sales130 units @ $21$3,500$3,340$3,370$3,110$3,380

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Description: Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventorysystem. Determine the cost assigned to the ending inventory using FIFO.DateActivitiesUnits Acquired at Cost Units Sold at RetailMay 1 B

The FIFO Method is a first in first out method.It is an inventory valuation method.Under this method…

Answered: Determine the cost assigned to the…

Business

Accounting

Determine the cost assigned to the ending inventory using FIFO.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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Question

Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory
system. Determine the cost assigned to the ending inventory using FIFO.
Date
Activities
Units Acquired at Cost Units Sold at Retail
May 1 Beginning inventory 190 units @ $10 = $1,900
May 5
Purchase
260 units @ $12 = $3,120
May 10 Sales
180 units @ $20
May 15 Purchase
140 units @ $13 = $1,820
May 24 Sales
130 units @ $21
$3,500
$3,340
$3,370
$3,110
$3,380

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