On July 1, Deuce Hardware, Inc.had an inventory of 300 gas grills costing $100 each.Purchases and sales during July are as follows: $\begin{array}{lll}\text{Date}& \text{Purchases}& \text{Sales}\\ \text{ July 3 }& & 100@\$125\text{ each }\\ \text{ July }10& 150@\$110\text{ each }& \\ \text{ July }17& & 150@\$130\text{ each }\\ \text{ July }17& 50@\$120\text{ each }& \end{array}$ What is the cost of Deuce's inventory on July 31 using the FIFO method?

A) $15, 000
B) $16, 000
C) $16, 500
D) $18, 000

Using the FIFO method, we assume that the first items purchased are the first items sold. Therefore, the cost of 200 units sold in July would be $100 per unit, since that was the cost of the initial inventory. We are left with 100 units, 50 of which were purchased on July 15 for $110 each, and 50 purchased on July 30 for $120 each.

To determine the cost of the remaining inventory, we must first sell the 50 units which were purchased on July 15. The cost of these units would be $110 each, as they were the most recent purchase. This brings our total cost for the month to $15,000 (300 x $100 initial inventory + 200 x $100 sold + 50 x $110 remaining inventory).

We are then left with 50 units purchased on July 30, which have a cost of $120 each. Therefore, the cost of Deuce's inventory on July 31 using the FIFO method is $16,500 (50 x $120 remaining inventory).