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Hi,I don’t know how to do this question.An organization’s inventory at 1 July is 15 units@$3.00 each.the following movements occur:
. 3 July 2006 5 units sold at $3.30 each
. 8 July 2006 10 units bought at $3.50 each
.12 July 2006 8 units sold at $4.00 each
Closing inventory at 31 July,using the FIFO method of inventory valuation would be:Answer:$41 the solution is 2@$3.00 +10@)3.50 = $41(later inventory= closing inventory)
Fifo means first in first out
Opening units 15@$3:00 (15 units)
Bought more 10@3:50
Total sold 5+8=13
Opening 15 – sold 13 = 2
Opening remained 2 @ 3:00=6 (A)
+
New bought 10@3:50=35(B)
=A+B=41
Hope y understand
Regards kashifKashif: Please do not answer questions in this forum – it is Ask the Tutor, and you are not the tutor 🙂
Mun: what Kashif has typed is correct 🙂
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