Inventory valuation question urgent

This topic has 5 replies, 2 voices, and was last updated 13 years ago by jonie90.

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June 25, 2012 at 8:41 am #53633
maes
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Hi, could someone please help on this question

Opening inventory is 50 and the following transactions took place in one month

Bought 100 @ $45
Sold 80
Bought 50 @ $50
Sold 60

What is the value of inventory at the end of the month

The answer is $2950.

Thanks
June 25, 2012 at 12:05 pm #101643
jonie90
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you don’t have opening inventory, how to calculate closing inventory. what method using? FIFO or AVC?
June 25, 2012 at 12:50 pm #101644
maes
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They are using FIFO method. The opening inventory is 50 units, I think it may of been at $40.
June 25, 2012 at 2:13 pm #101645
jonie90
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open 50 @$40
bought 100 @$45

Sold 80 : 50 @$40
30 @$45

remain : 70 @$45
bought 50 @$50

sold 60 @ $45

remain 10 @$45 and 50 @$50 ==> total closing inventory = $2950 as the ans
June 25, 2012 at 2:26 pm #101646
maes
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Thank you, I was multiplying the whole 60 by $45. On another question I calculated from the oldest cost price to the most recent and it was correct. Thank you again. 🙂
June 25, 2012 at 2:39 pm #101647
jonie90
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you’re welcome
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