FRA stock valuation

emma123
emma123 Well-KnownRegistered Posts: 108
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

Comments

  • Rinske
    Rinske Font Of All Knowledge Registered Posts: 2,453
    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
    emma123 Well-Known Registered Posts: 108
    ur a star Rinske!

    Thank u for helpin me out :)
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