Ask Experts Questions for FREE Help !
Ask
    MAXIBEPEARL's Avatar
    MAXIBEPEARL Posts: 1, Reputation: 1
    New Member
    		  
    #1

    May 4, 2007, 06:03 AM
    accounting, fifo and lifo
    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's Avatar
    ebaines Posts: 12,131, Reputation: 1307
    Expert
    		  
    #2

    May 4, 2007, 02:53 PM
    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's Avatar
    omu Posts: 5, Reputation: 1
    New Member
    		  
    #3

    May 6, 2007, 03:31 AM
    Answer B - POUND 704. ( 16 @ 44 )
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Fifo and lifo [ 3 Answers ]

Can someone help me to solve this question with explanation?It is urgent... I totally don know what is FIFO and LIFO and how to answer the question like this. Sunrise Company draws up its financial statements every 31March. The details of its purchases and sales for the financial year are as...

Fifo and lifo [ 3 Answers ]

Can a company use fifo to account for inventory and then use lifo for reporting financial and tax info and is this what is known as the lifo conformity rule?

Lifo/fifo [ 2 Answers ]

I would appreciate any help I could get on these. This stuff really confuses me. Aug. 1 Balance 200@$3.20 Aug. 2 150@$5.50 Sales Aug. 4 550@$3.10 Purchases Aug. 5 ...

Fifo/lifo [ 1 Answers ]

When using the fifo or lifo method to compute cost of goods sold and ending inventory, how do you determine what goes in the ending inventory column and what goes into the cogs column. Example: Opening Inv. 9,000 units@ $16 Purchase 4/16: 27,000 units @ $18 Purchase 7/28: 30,000 units @ $23 ...

View more questions Search