ACCA FA · Guided practice (Show me how)
Chapter 9: Inventory and IAS 2
Inventory - FIFO and average cost
On 1 June 2016 a company held 600 units of finished goods valued at $10 each.
During June the following purchases took place.
| Date | Units purchased | Cost per unit $ |
|---|---|---|
| 8 June | 400 | 14 |
| 20 June | 500 | 16 |
Goods sold during June were as follows.
| Date | Units sold | Sales price per unit $ |
|---|---|---|
| 3 June | 200 | 22 |
| 15 June | 300 | 24 |
| 27 June | 400 | 26 |
(a) FIFO
Calculate the number of units in the company's closing inventory at 30 June 2016, and the value of that inventory using FIFO.
(b) Average cost
Calculate the value of the same closing inventory at 30 June 2016 using the average cost basis.
Opening this exercise…