AAT ADSY Advance Synoptic, practice assessment question 3

Annaoj90
Annaoj90 Registered Posts: 12
hi there

can someone help me with this one please, question 1.3 synoptic practice assessment 1
i am really struggling with inventory valuation.... My answer is different than answer provided by AAT.
My answer Is 8100 but AAT is 8220????
Please see attachment as for some reason I am unable to paste screenshot in here.

thanks
Joanna

Best Answer

  • Pian32
    Pian32 MAAT Posts: 448
    Accepted Answer
    Hi Annaoj

    We know that the system is FIFO and that 3,600kg remain so we can work from most recent purchase backwards.

    11/1 All 3,200kg is in there for £7,360

    6/1 Only want 400kg which is a quarter of purchased. £3440/4 = 860

    Total value = 7360 + 860 = £8,220

    To do it properly would take more time but can be used on more complex calculations easier.
    Date ----Amount - Value --- Total held --- Total Value
    1/1/X8 - 8000kg - £18,000 -- 8,000 ----- 18,000
    6/1/X8 - 1,600kg - £3,440 -- 9,600 ------ 21,440
    11/1/X8 - 3,200kg - £7,360 - 12,800 ----- 28,800

    13/1/X8 - (9,200kg)- (£20,580)- 3,600 ---- 8,220

    Sorry about all the '-' just wanted to try and line it up. By laying it out more you can easily apply the AVCO method should you be required to.
    AAT Level 4, MAAT
    ACCA in progress
    F4- Passed Aug 2020
    F5- Passed Dec 2020
    F6- Passed Sep 2020
    F7- Passed June 2021
    F8 - Planned Sep 2021
    F9 - Passed June 2021

Answers

  • Annaoj90
    Annaoj90 Registered Posts: 12
    Thank you Pian32. That makes sense for me know. Much appreciated
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