- May 8, 2020 at 4:32 pm
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 units
I 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.May 9, 2020 at 8:30 am
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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