MI – May 2021 – L1 – SB – Q3a – Accounting for Cost Elements

Calculate closing inventory and issued materials values using FIFO and LIFO methods.

Question

Koloko Wakama Plc trades in farm feeds. The following information relates to the movement of inventory for the month of June 2019:

Date	Units	Cost/Unit
June 6	20,000	N10.00
June 16	15,000	N12.50
June 26	30,000	N15.00

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. Last-in-first-out (LIFO) method (7 Marks)

Answer

KOLOKO WAKAMA

Store ledger account for June, 2019 using FIFO method

Store ledger account for the month of June 2019 using LIFO method

Tags: Costing, FIFO, Inventory, LIFO
Level: Level 1

Topic: Accounting for Cost Elements
Series: MAY 2021

Uploader: Kwame Aikins