Bought Sold
January 40 at £30 each June 30 for £68 each
April 20 at £44 each September 14 for £60 each


19 Based on the above figures, what is the closing inventory value that would be shown in the Balance Sheet using FIFO?
a. £480
b. £704
c. £700
d. £1088
e. £960

ebaines

I suggest that you lay these transactions out chronologically. If I read your data correctly, the company buys inventory in Jan and April, and then sells it off in June and Sep - do I have that right? Well, under FIFO you assume that the product you sell in April and Sep comes first from the pile of stuff you bought in Jan, and only after that is all gone do you start selling the stuff you bought in April. So the question is: what's the value of the stuff still in invntory from the January purchase (if any) plus the value of the stuff left over from the April purchase (if any)? Add those up and you get your answer. Hope this helps.

omu

answer B - POUND 704. ( 16 @ 44 )