Salmone Company reported the following purchases and sales for its only product. Salmone uses a periodic inventory system. Determine the cost assigned to cost of goods sold using LIFO May 1 beginning inventory: 210 units @ $16 May 5 purchase: 250 units @ $18 May 10 sales: 170 units @ $26 May 15 purchase: 130 units @ $19 May 24 sales: 120 units @ $27

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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.