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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

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Answer:

Ending Inventory for July: $551

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.

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