FRA stock valuation

emma123

My head is fried with stock valuation! Is anyone else finding this topic hard? I thought I understood what FIFO, LIFO and AVCO meant but when I do a few questions I end up getting them wrong so any help for this question below would be greatly appreciated

This question is from Osborne workbook Chapter 9 Q. 9.4

Wyvern Office Supplies sells a range of pens paper etc. One of its lines is photocopying paper for which the stock movements in Jan 2004 were :

1 JAN Stock of 800 reams (a ream is 500 sheets) of paper brought forward at a cost of £2.00 per ream

5 JAN Sold 700 reams

11 JAN Bought 1,200 reams at £2.20 per ream

15 JAN Sold 600 reams

19 JAN Bought 1,000 reams at £2.10 per ream

21 JAN Sold 400 reams

26 JAN Bought 700 reams at £2.25 per ream

Selling price of each ream is £3.25


Question asks to calculate :

Sales for Jan - I answered this correctly

Closing stock for 31 Jan using FIFO and LIFO - this is the part I really need help with! It's probably straightforward though and I'll feel stupid afterwards for asking!

Cheers
Emma

Rinske

emma123 wrote: »

Closing stock for 31 Jan using FIFO and LIFO - this is the part I really need help with! It's probably straightforward though and I'll feel stupid afterwards for asking!

Cheers
Emma

We all got those moments! If confused try writing it out for a bit, just step by step on some scrap paper.

FIFO (first in first out):

1 Jan in stock 800 x £2.
5 Jan sold 700 x £2.
In stock left: 100 x £2.

11 Jan 1200 x £2.20
In stock:
100 x £2
1200 x £2.20

15 Jan 500 sold:
100 x £2 & 400 x £2.20
In stock left:
800 x £2.20

19 Jan + 1,000 x £2.10
In stock:
800 x £2.20
1000 x £2.10

21 Jan 400 sold x £ 2.20
In stock:
400 x £2.20
1000 x £2.10

26 Jan 700 x £2.25 bought.
In stock:
400 x £2.20
1,000 x £2.10
700 x £2.25

Closing stock is the stock listed on the 26th of Jan.



LIFO (last in first out):

1 Jan in stock 800 x £2.
5 Jan sold 700 x £2.
In stock left: 100 x £2.

11 Jan 1200 x £2.20
In stock:
100 x £2
1200 x £2.20

15 Jan 500 sold:
500 x £2.20
In stock left:
100 x £2
700 x £2.20

19 Jan + 1,000 x £2.10
In stock:
100 x £2
700 x £2.20
1000 x £2.10

21 Jan 400 sold x £2.10
In stock:
100 x £2
700 x £2.20
600 x £2.10

26 Jan 700 x £2.25 bought.
In stock:
100 x £2
700 x £2.20
600 x £2.10
700 x £2.25

Closing stock is the stock listed on the 26th of Jan.

emma123

ur a star Rinske!

Thank u for helpin me out