MI – Nov 2015 – L1 – SB – Q3 – Accounting for Cost Elements

Determines inventory balance using FIFO and weighted average pricing methods.

Question

A company located in Ijora area of Lagos extracted the following figures from its materials analysis sheet:

Date	Transaction	Quantity	Unit price (N)
1st January	Balance b/f	10,000	50
25th January	Receipt	7,000	55
6th February	Issue	14,000	–
3rd March	Receipt	5,000	60
27th March	Receipt	4,500	62
4th June	Issue	7,500	–
24th June	Issue	2,500	–
30th June	Receipt	6,500	65

You are required to record the above transactions in the inventory ledger and determine the value of the inventory balance at the end of June 2015 using:
a. First-in-First-out pricing method. (10 Marks)
b. Weighted average pricing method. (10 Marks)

(Total 20 Marks)

Answer