Quark Inc.just began business and made the following four inventory purchases in June: $$\begin{array} { r r r r }
\text { June } & 1 & 150 \text { units } & \$ 990 \
\text { June } & 10 & 200 \text { units } & 1,344 \
\text { June } & 15 & 200 \text { units } & 1,368 \
\text { June } & 28 & 150 \text { units } & 1,062 \
& & & \$ 4,764
\end{array}$$ A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand.Using the FIFO inventory method the amount allocated to ending inventory for June is
A)$1326.
B)$1320.
C)$1404.
D)$1416.

Question

Quark Inc.just began business and made the following four inventory purchases in June: $$\begin{array} { r r r r } 
\text { June } & 1 & 150 \text { units } & \$ 990 \
\text { June } & 10 & 200 \text { units } & 1,344 \
\text { June } & 15 & 200 \text { units } & 1,368 \
\text { June } & 28 & 150 \text { units } & 1,062 \
& & & \$ 4,764
\end{array}$$ A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand.Using the FIFO inventory method the amount allocated to ending inventory for June is
A)$1326.
B)$1320.
C)$1404.
D)$1416.

Quizplus · Accepted Answer

Under FIFO, the ending inventory consists of the most recent purchases. The last 200 units were purchased on June 28 (150 units) and June 15 (50 units from the 200 units purchased). The cost is (150 units x $7.08) + (50 units x $6.84) = $1,062 + $342 = $1,404.

Quark IncJust Began Business and Made the Following Four Inventory Purchases