AAT ADSY Advance Synoptic, practice assessment question 3

Annaoj90

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

Pian32

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.

Annaoj90

Thank you Pian32. That makes sense for me know. Much appreciated