- 10 Marks
FA – May 2022 – L1 – SB – Q6a – Accounting for Inventories in Accordance with IAS 2
Present a table of inventory movements and calculate the closing inventory using the weighted average cost method.
Question
Oyin Limited purchases and sells identical articles. The table below shows the inventory movement in the store, and the company has a policy of using the weighted average cost method in its storekeeping. The company’s accounting period ends on December 31 each year.
| Month | Quantity Purchased | Unit Price (₦) | Quantity Issued/Sold |
|---|---|---|---|
| Brought Forward | 150 | 100 | |
| February 2020 | 350 | 150 | |
| April 2020 | 340 | ||
| June 2020 | 440 | 180 | |
| August 2020 | 420 | ||
| October 2020 | 420 | 210 | |
| December 2020 | 360 |
Required:
Present a table of the inventory movements from January to December 2020 and show the cost of inventory on December 31, 2020.
Find Related Questions by Tags, levels, etc.
- Tags: Inventory Management, Inventory Valuation, Weighted Average Cost
- Level: Level 1
- Topic: Accounting for Inventories (IAS 2)
- Series: MAY 2022
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