Question

Nash's Trading Post, LLC has the following inventory data:

July 1 Beginning inventory 22 units at $14 $308
7 Purchases 78 units at $15 1170
22 Purchases 11 units at $16 176
$1654

A physical count of merchandise inventory on July 30 reveals that there are 36 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for July is

Answer 1

Ending Inventory for July: $551

Step-by-step explanation:

Units on hand at the end of the period: 36

Purchases of remaining units:

• 11 units at $16 = $176
• 25 units (36 - 11) at $15 = $375

Amount allocated to ending inventory for July: $551

The first in, first out (FIFO) method of inventory valuation is a cost flow assumption that the first goods purchased are also the first goods sold.