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A business had opening inventory of 300 units valued at $4.50 per unit on 1st May. The following receipts and issues were recorded in May.
2nd May : Issue : 200 units
7th May : Receipt : 500 units @ $4.80/unit
13th May : Issue : 400 units
20th May : Receipt : 500 units @ $5.00/unit
28 May : Issue : 450 unitsI have calculated the value of Issues according to both Fifo and Lifo and it is correct but the value of Inventory I have calculated is not matching with any of the options given. Pls help.
I am getting 200 acc to Fifo and 130 but they aren’t in the options.I do not know how you are arriving at your figures, because the closing inventory is 250 units (and so the value of the inventory cannot possibly be $200 or $130).
With FIFO the closing inventory will be values at $5 per unit, and so the total value is $1,250.
With LIFO, 100 will be valued at $4.50 per unit; 100 will be valued at $4.80 per unit; and the remaining 50 will be valued at $5.00 per unit.
I do not know why you valued the issues because that is not needed and is wasting time.
Have you watched my free lectures on this? The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
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