- 20 Marks
Question
CORONAVIRUS LIMITED transactions for January, 2020 for stock purchases and sales were as follows:
| Date | Particulars | Units | Unit Cost (GHS) |
|---|---|---|---|
| January 1 | Stock-on-hand | 500 | 250 |
| January 1 | Sales | 100 | |
| January 2 | Purchases | 200 | 260 |
| January 8 | Sales | 200 | |
| January 10 | Purchases | 300 | 300 |
| January 17 | Sales | 300 | |
| January 23 | Purchases | 100 | 270 |
| January 25 | Sales | 200 |
You are required to compute the January 31, 2020 closing stock using:
- First-in, First-out (FIFO) based on a periodic inventory
- Last-in, First-out (LIFO) based on a perpetual inventory
- Moving Average based on perpetual inventory
Answer
Total units purchased + opening = 500 + 200 + 300 + 100 = 1,100
Total sales = 100 + 200 + 300 + 200 = 800
Closing units = 300
- FIFO Periodic: Sales from earliest. COGS: 500@250 = 125,000; 200@260 = 52,000; 100@300 = 30,000; Total COGS 207,000
Closing stock: 200@300 = 60,000 + 100@270 = 27,000 = GHS 87,000
- LIFO Perpetual:
- Open: 500@250
- Sale 100: -100@250; Remain 400@250
- Purchase 200@260: 400@250, 200@260
- Sale 200: -200@260; Remain 400@250
- Purchase 300@300: 400@250, 300@300
- Sale 300: -300@300; Remain 400@250
- Purchase 100@270: 400@250, 100@270
- Sale 200: -100@270, -100@250; Remain 300@250
Closing: 300@250 = GHS 75,000
- Moving Average Perpetual:
- Open: 500@250 = avg 250
- Sale 100: @250; Remain 400@250
- Purchase 200@260: Total 600 units, cost 100,000 + 52,000 = 152,000; avg 253.33
- Sale 200: @253.33; Remain 400@253.33
- Purchase 300@300: Total 700 units, cost 101,332 + 90,000 = 191,332; avg 273.33
- Sale 300: @273.33; Remain 400@273.33
- Purchase 100@270: Total 500 units, cost 109,332 + 27,000 = 136,332; avg 272.66
- Sale 200: @272.66; Remain 300@272.66 = GHS 81,798
- Tags: Closing Stock, FIFO Periodic, FIFO Perpetual, LIFO Perpetual, Moving Average Perpetual
- Level: Level 1
- Topic: Stock Identification and Valuation (IAS 2)
- Series: JULY 2020
- Uploader: Samuel Duah