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    As - Inventory Valuation - Fifo - Avco

    Uploaded by

    MUSTHARI KHAN
    This document contains information on inventory valuation methods including FIFO and AVCO. It provides examples of inventory purchase and sales transactions with calculations required to value ending inventory and cost of goods sold using each method. Multiple examples are given across different time periods and products to illustrate the application of FIFO and AVCO.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    As - Inventory Valuation - Fifo - Avco

    Uploaded by

    MUSTHARI KHAN
    42 views4 pages
    This document contains information on inventory valuation methods including FIFO and AVCO. It provides examples of inventory purchase and sales transactions with calculations required to value ending inventory and cost of goods sold using each method. Multiple examples are given across different time periods and products to illustrate the application of FIFO and AVCO.

    Original Title

    AS- INVENTORY VALUATION -- FIFO -AVCO-----

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    This document contains information on inventory valuation methods including FIFO and AVCO. It provides examples of inventory purchase and sales transactions with calculations required to value ending inventory and cost of goods sold using each method. Multiple examples are given across different time periods and products to illustrate the application of FIFO and AVCO.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    42 views4 pages

    As - Inventory Valuation - Fifo - Avco

    Uploaded by

    MUSTHARI KHAN
    This document contains information on inventory valuation methods including FIFO and AVCO. It provides examples of inventory purchase and sales transactions with calculations required to value ending inventory and cost of goods sold using each method. Multiple examples are given across different time periods and products to illustrate the application of FIFO and AVCO.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    VALUATION OF INVENTORY

    1.Sifan Girnary values inventory using the AVCO method. Opening inventory on 1 April 2016 was 400 units at an
    average cost price of $ 75.

    The following transactions took place during the month of April 2016

    Date Purchases Sales

    12 April 250 units at £67.20 each


    18 April 300 units
    21 April 200 units at £83 each
    24 April 240 units

    (a) Calculate the value of inventory at 30 April 2016 using the AVCO method.
    (b) Calculate the value of inventory at 30 April 2016 using the FIFO method

    2.The following information relates to the purchase and issue of Part 264 for Jackson Construction.

    10 May purchased 200 boxes costing $ 3·40 per box.


    28 June purchased 220 boxes costing $ 3·50 per box.
    02 July issued 170 boxes.
    14 July returned 10 boxes bought on 28 June.
    15 July issued 80 boxes.

    Calculate the value of inventory using the First-In-First-Out (FIFO) method.

    3.The following transactions in respect of material Y occurred during the six months ended 30th June 2021:

    Month Purchase (units) Price per unit ($) Issued units.

    January 200 25 Nil


    February 300 24 250
    March 425 26 300
    April 475 23 550
    May 500 25 800
    June 600 20 400

    Required: calculate the value of inventory by FIFO and AVCO method

    2.The following information is provided by Sunrise Industries for the fortnight of April 2021:

    Material Exe:

    inventory on 1-4-2021 100 units at $ 5 per unit.

    Purchases

    5-4-2021, 300 units at $ 6 8-4-2021, 500 units at $ 7 12-4-2021, 600units at $ 8

    Issues

    6-4-2021, 250 units 10-4-2021, 400units 14-4-2021, 500units


    1
    Page

    Required:
    (A) Calculate using FIFO and AVCO methods of pricing issues:
    (a) the value of materials consumed during the period
    (b) the value of inventory of materials on 15-4-2021.

    3.XY Limited buys a particular product from Lagos and sells to customers in Ile-Ife. For the six months ended
    December 31, 2022, the company recorded the following transactions. There was an opening balance of 5,000
    units valued at $ 70 each.

    Date Quantity bought (units) Cost per unit ($)

    July 5,000 74
    September 4,500 77
    November 7,500 79

    Date Quantity sold (units) Selling Price per unit ($)

    August 7,000 100


    October 5,000 110
    December 8,000 115

    You are required to:

    a. Record the above transactions on a store ledger card using each of the following methods:

    i. FIFO ii. Weighted Average

    b. Determine the gross profit for the period using both FIFO and the weighted Average method.
    1.Koloko Wakama Plc trades in farm feeds. The following information relate to the movement of inventory for
    the month of June 2019:

    Date Units Cost/Unit $

    June 6 20,000 10.00


    June 16 15,000 12.50
    June 26 30,000 15.00

    The following issues were made to the production floor from the store department:

    Date Units

    June 8 8,000
    June 18 10,000
    June 24 6,000
    June 29 20,000

    You are required to:

    a. Determine the value of closing inventory and the value of the materials issued as at the end of June, 2019
    using

    i. First-in-first-out (FIFO) method (7 Marks)

    ii. Average cost (AVCO) method (7 Marks)


    2
    Page

    2.A firm has the following transactions with its product R.


    Year 1

    Opening inventory: nil


    piurchase 10 units at $300 per unit
    purchase 12 units at $250 per unit
    issued 8 units at $400 per unit
    purchase 6 units at $200 per unit
    issued 12 units at $400 per unit

    Year 2

    Purchase 10 units at $200 per unit


    issued 5 units at $400 per unit
    purchase 12 units at $150 per unit
    issued 25 units at $400 per unit

    Required

    Using FIFO, calculate the following on an item-by-item basis for both year 1 and year 2.

    (i) The closing inventory (ii) The sales (iii) The cost of sales (iv) The gross profit

    MARKING SCHEME
    3
    Page
    Page 4

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