The local YWCA began the year with 20 notebooks for its after-school students, w
ID: 2739239 • Letter: T
Question
The local YWCA began the year with 20 notebooks for its after-school students, which were purchased last year for the price of 50 cents each. The Y bought an additional 100 notebooks at 60 cents each in March. In April, they used 60 notebooks. By August, they Y only had 30 notebooks left, so they bought another 100 notebooks at a cost of 75 cents each. By the last day of the fiscal year, the Y and only had 15 notebooks.
Have Bought Used Remaining
20 @$.50
100 @$.60
100 @$.75
220 205 15
What would be the value of the inventory that the YWCA would report on its Balance Sheet at the end of the year if it used FIFO?
a) $11.25, b) $7.50, c) $133.75, d) $137.50
Explanation / Answer
Inital Inventory = 20*.5 =$10
Additonal notebooks = 100*.60 =$60
By August they had 30 notebooks left that means value of inventory left = 30*.60 = $18
As at the end it has only 15 notebooks left we would have = 15*0.75(last pruchased price)
=$11.25
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