### Inventory Management Case Study: Wildhorse CompanyWildhorse Company just began business and made the following four inventory purchases in June:- **June 1**: 183 units, costing $1098- **June 10**: 244 units, costing $1708- **June 15**: 244 units, costing $1952- **June 28**: 183 units, costing $1647The total cost of inventory purchased in June amounts to $6405.The company uses a periodic inventory system. A physical count of merchandise inventory on June 30 reveals that there are 244 units on hand. Using the Last-In, First-Out (LIFO) inventory method, the value of the ending inventory on June 30 is:- $1525- $2135- $2196- $1465To determine the value of the ending inventory using the LIFO method, we need to consider that the last units purchased are the first ones considered sold. Therefore, the remaining inventory will be from the earlier purchases.### Explanation:Under the LIFO method, we deduct the most recent purchases first:1. Units in the ending inventory: 244 units2. The last purchase on June 28 consists of 183 units. - All 183 units are part of the ending inventory.3. Require additional 61 units to complete ending inventory (244 - 183 = 61 units). - These 61 units will be taken from the June 15 purchase.Calculation of ending inventory:- June 28: 183 units x price per unit ($1647 / 183) = $1647- June 15: 61 units x price per unit ($1952 / 244) = $488.52 (rounded for calculation)Sum of ending inventory:- Inventory value = $1647 + $488.52 = $2135.52Therefore, the closest option provided is **$2135**.### Conclusion:Hence, the value of the ending inventory on June 30 using the LIFO method is **$2135**.

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Description: ### Inventory Management Case Study: Wildhorse CompanyWildhorse Company just began business and made the following four inventory purchases in June:- **June 1**: 183 units, costing $1098- **June 10**: 244 units, costing $1708- **June 15**: 244 units

INVENTORY VALUATIONInventory Valuation is a Method of Calculation of Value of Inventory at the End…

Business

Accounting

Wildhorse Company just began business and made the following four inventory purchases in June: June 1 183 units. June 10 June 15 June 28 244 units 244 units 183 units $1525. $2135. $2196. O$1465. $1098 1708 1952 1647 $6405 The company uses a periodic inventory system. A physical count of merchandise inventory on June 30 reveals that there are 244 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is

Wildhorse Company just began business and made the following four inventory purchases in June: June 1 183 units. June 10 June 15 June 28 244 units 244 units 183 units $1525. $2135. $2196. O$1465. $1098 1708 1952 1647 $6405 The company uses a periodic inventory system. A physical count of merchandise inventory on June 30 reveals that there are 244 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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