Question

Sheridan Company just began business and made the following four inventory purchases in June: June 1 144 units $ 952 June 10 184 units 1472 June 15 184 units 1564 June 28 144 units 1296 $ 5284 A physical count of merchandise inventory on June 30 reveals that there are 194 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for June is

Answer 1

Answer:

$210,688

Explanation:

The LIFO method of accounting for inventory involves issuing the last items purchased first and those purchased first are issued last hence the acronym LIFO which means last in first out

Given that June 1 144 units $ 952 June 10 184 units 1472 June 15 184 units 1564 June 28 144 units 1296 $ 5284 A physical count of merchandise inventory on June 30 reveals that there are 194 units on hand

Total number purchased during the month

= 144 + 184 + 184 + 144

= 656 units

Using the last in first out method, the 194 units left at the end would be made up of the 144 units purchased on June 1 and 50 units purchased on 10 June hence the amount allocated to ending inventory for June is

= 144 * $952 + 50 * $1472

= $210,688