A Company Just Starting Business Made the Following Four Inventory

question 122

Multiple Choice

A company just starting business made the following four inventory purchases in June: $\begin{array}{lrlr}\text { June } 1 & 150 \text { units } & \$ 390 \\\text { June } 10 & 200 \text { units } & 585 \\\text { June } 15 & 200 \text { units } & 630 \\\text { June } 28 & 150 \text { units } & 510\\&&\$2,115\end{array}$ A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is

• A) $683.
• B) $825.
• C) $1,290.
• D) $1,432.

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Definitions:

Transactional Motive

The transactional motive is the need to hold cash for the purpose of conducting day-to-day business operations, such as paying wages and suppliers.

Zero Balance Account

A zero balance account is a type of bank account that maintains a balance of zero dollars by automatically transferring funds from a master account in the exact amount of transactions clearing the account.

Line of Credit

A flexible loan from a bank or financial institution, where a borrower can access funds up to a specified limit at any time.