To determine the value of ending inventory using the FIFO (First-In, First-Out) method, you need to follow these steps:
1. Start by arranging the purchases in chronological order, from the earliest to the latest:
- February 10: 30 jet skis purchased at $4,000 each
- May 12: 80 jet skis purchased at $3,000 each
- June 15: 20 jet skis purchased at $3,500 each
- July 20: 15 jet skis purchased at $2,500 each
2. Calculate the total number of jet skis purchased throughout the year. This will be the sum of the jet skis purchased in each transaction:
30 + 80 + 20 + 15 = 145 jet skis
3. Determine the total cost of the jet skis purchased throughout the year. To do this, multiply the number of jet skis purchased in each transaction by their respective cost, then sum up the results:
(30 * $4,000) + (80 * $3,000) + (20 * $3,500) + (15 * $2,500) = $1,200,000
4. Calculate the cost per jet ski by dividing the total cost of the jet skis purchased by the total number of jet skis:
$1,200,000 / 145 = $8,275.86 (rounded to two decimal places)
5. Finally, calculate the value of the ending inventory by multiplying the cost per jet ski by the number of jet skis left in inventory:
$8,275.86 * 70.5 = $583,661.54
Therefore, the correct answer is not listed among the options you provided. The value of Mahalyk's ending inventory at the end of July, using the FIFO method, is approximately $583,661.54.