Hi!

yup, i have worked out the question, but i'm not really sure about it thats why i am asking. here's the question & then how i worked it out. just tell me whether its correct. will really appreciate it =)

On 1st August the petrol tank was empty.

2nd August received 10,000 litres of petrol @<hidden> 0.75 per litre

Next day, 5000 litres were received @<hidden> 0.78 per litre

On 5th Aug 6000 litres were sold

Same day, another 1000 litres were received @<hidden> 0.79

on 7th Aug 2000 litres were sold

Calculate the closing stock values usign all the 3 methods, LIFO, FIFO, AVCO

here's my working for FIFO oNLY:

10,000-6000= 4000... since 6000 litres were sold

4000*0.75= 3000
5000*0.78= 3900

1000*0.79= 790

2000 litres were sold again..so 4000-2000= 2000

hence: 2000*0.75= 1500
5000*0.78= 3900
1000*0.79= 790
----- -----
8000 6190

so value of ending inventory = 6190

is it right?

Ending Inventory Value using FIFO:
2,000 litres x 0.75 = 1,500
5,000 litres x 0.78 = 3,900
1,000 litres x 0.79 = 790

Total = 1,500 + 3,900 + 790 = $6,190


Yes, 6,190 is correct.

awww Thank you SOOOO much for taking the trouble to reply back & answer my question! =) thanks alot! God bless you :)

Hi, I have an accounting test tomorrow and completed your question for test practice. Since you helped me, I will care to help you too. I got the same answer as you guys for FIFO.

And for LIFO:

8000 x £0.75 = £6,000 :)

If you read this and you need a further explanation, I will be here. Good Luck :eek:

For AVCO I worked out the answer to be £6, 160.