A company just starting business made the following four inventory purchases in June: $$\begin{array} { r r r r }
\text { June } & 1 & 150 \text { units } & \$ 390 \
\text { June } & 10 & 200 \text { units } & 598 \
\text { June } & 15 & 200 \text { units } & 630 \
\text { June } &28 & 150 \text { units } & \underline { 510 } \
& & & \underline { \$ 2,128 }
\end{array}$$ A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using the LIFO inventory method the value of the ending inventory on June 30 is

Question

A company just starting business made the following four inventory purchases in June: $$\begin{array} { r r r r } 
\text { June } & 1 & 150 \text { units } & \$ 390 \
\text { June } & 10 & 200 \text { units } & 598 \
\text { June } & 15 & 200 \text { units } & 630 \
\text { June } &28 & 150 \text { units } & \underline { 510 } \
& & & \underline { \$ 2,128 }
\end{array}$$ A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using the LIFO inventory method the value of the ending inventory on June 30 is

Quizplus · Accepted Answer

Under LIFO, the last items purchased are the first to be used. The ending inventory of 200 units would be valued using the earliest purchases: 150 units from June 1 ($390) and 50 units from June 10 ($598/200 units * 50 units = $150), totaling $540.

A Company Just Starting Business Made the Following Four Inventory