Salmone Company Reported the Following Purchases and Sales for Its

question 123

Multiple Choice

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.
$$\begin{array} { | c | l | l | l | } \hline \text { Date } & { \text { Activities } } & \text { Units Acquired at Cost } & \text { Units Sold at Retail } \\\hline \text { May 1}& \text { Beginning Inventory } & 150 \text { units @ } \$ 10.00 & \\\hline 5& \text { Purchase } & 220 \text { units @ } \$ 12.00 & \\\hline 10& \text { Sales } & & 140 \text { units @ \$20.00 } \\\hline 15& \text { Purchase } & 100 \text { units @ } \$ 13.00 & \\\hline 24& \text { Sales } & & 90 \text { units @ \$21.00 } \\\hline\end{array}$$

• A) $2,590
• B) $2,850
• C) $2,580
• D) $2,860
• E) $2,460

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Definitions:

Ability to Meet Obligations

A financial assessment of whether a company or individual has the resources necessary to pay off their debts as they come due.

Return on Assets

A profitability ratio that measures how efficiently a company is using its assets to generate earnings.

Direct Method

In cash flow reporting, a method that shows the specific sources and uses of cash, categorizing cash flows into operating, investing, and financing activities.

Net Cash Provided

The amount of cash generated by a company’s operations after accounting for all cash inflows and outflows.