Grape Gratuities Company has the following inventory data: $$\begin{array} { r l r r }
\text { July } 1 & \text { Beginning inventory } & 40 \text { units at } \$ 20 & \$ 800 \
7 & \text { Purchases } & 140 \text { units at } \$ 21 & 2,940 \
22 & \text { Purchases } & 20 \text { units at } \$ 22 & { 440 }\&&& { \$ 4,180 }
\end{array}$$ A physical count of merchandise inventory on July 30 reveals that there are 50 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for July is
A)$1,170.
B)$1,010.
C)$1,070.
D)$1,100.

Question

Grape Gratuities Company has the following inventory data: $$\begin{array} { r l r r } 
\text { July } 1 & \text { Beginning inventory } & 40 \text { units at } \$ 20 & \$ 800 \
7 & \text { Purchases } & 140 \text { units at } \$ 21 & 2,940 \
22 & \text { Purchases } & 20 \text { units at } \$ 22 & { 440 }\&&& { \$ 4,180 }
\end{array}$$ A physical count of merchandise inventory on July 30 reveals that there are 50 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for July is
A)$1,170.
B)$1,010.
C)$1,070.
D)$1,100.

Quizplus · Accepted Answer

Under FIFO, the ending inventory consists of the most recent purchases. Therefore, the 50 units on hand would include 20 units at $22 and 30 units at $21, totaling $1,070.

Grape Gratuities Company Has the Following Inventory Data A Physical Count of Merchandise Inventory on July 30 Reveals