Problem 8c: Inventory Costing: FIFO, LIFO 1. The Gagnon Merchandising Corporation began July operations with merchandise inventory of 10 units, each of which cost $85. During July, Gagnon Merchandising made the following purchases: (1) July 5, 25 units @ $86 per unit, (2) July 16, 15 units @ $88 per unit, (3) July 27, 30 units @ $89 per unit. During July the Company sold the following units at a sales price of $150 per unit: July 7, 18 units, July 21, 10 units, July 28, 29 units. Operating expenses in July were $2,700. The Company estimates its income taxes expense will be approximately 35% of income before taxes. Using the FIFO inventory method, determine the inventory dollar amount on July 1. A) $890 B) $860 C) $1,500 D) $850 E) $880