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Exercises For Unit 4 Inventory Valuation

The document contains 7 exercises on inventory valuation using different inventory costing methods including FIFO, LIFO, and weighted average under both perpetual and periodic inventory systems. The exercises provide inventory purchase and sales data and ask the reader to calculate cost of goods sold, ending inventory values, and in some cases profit, for individual inventory items or for a company as a whole.

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Dr. Mohammad Noor Alam
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2K views

Exercises For Unit 4 Inventory Valuation

The document contains 7 exercises on inventory valuation using different inventory costing methods including FIFO, LIFO, and weighted average under both perpetual and periodic inventory systems. The exercises provide inventory purchase and sales data and ask the reader to calculate cost of goods sold, ending inventory values, and in some cases profit, for individual inventory items or for a company as a whole.

Uploaded by

Dr. Mohammad Noor Alam
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
You are on page 1/ 3

UNIT 4

INVENTORY VALUATION

Exercise 1
From the following, determine cost of goods sold.
Item Amount(RO)
Purchases 40000
Inventory ( 1 Jan. ) 70000
Freight in 2000
Purchases returns 4000
Purchases Discounts 1000
Inventory (31 Dec.) 48000

Exercise 2
Company Q has the following information regarding its merchandise for 2018.
Date Event Details
Jan. 1 Balance 400 units @ RO3
May 1 Purchase 200 units @ RO4
July 15 Sale 300 units
Oct. 10 Purchase 250 units @ RO5
Nov. 14 Sale 400 units
Dec. 9 Purchase 100 units @ RO 8
Dec. 18 Sale 125 units

a. Using the periodic system, determine cost of goods sold and the ending Merchandise Inventory
balance under FIFO, LIFO, and weighted average.
b. Determine FIFO, LIFO, and weighted average under the perpetual system.

Exercise No. 3
Stores Ledger Account of Kanthi & Co. shows the following particulars:
2018
Jan. 1 Opening Balance: 500 units @ OMR 4
Jan. 5 Received from vendor: 200 units @ OMR 4.25
Jan. 12 Received from vendor: 150 units @ OMR 4.10
Jan. 20 Received from vendor: 300 units @ OMR 4.50
Jan. 25 Received from vendor: 400 units @ OMR 4
Materials were issued as follows:
2018
Jan. 4 – 200 units
Jan. 10 – 400 units
Jan. 15 – 100 units
Jan. 19 – 100 units
Page 1
Jan. 26 – 200 units
Jan. 30 – 250 units
Issue is to be priced on the principle of ‘First in First out’. Write out the Stores Ledger Account in respect
of the materials for the month of January, 2008. Perpetual Inventory System is maintained.

Exercise No. 4
From the following transactions of Anisha & Co., prepare the stores ledger account for the firm, using
LIFO method, Perpetual Inventory System is maintained.
2018
1 July Opening stock 500 units @ OMR 20 each
4 July Purchased 400 units @ OMR 21 each
6 July Issued 600 units
8 July Purchased 800 units @ OMR 24 each
9 July Issued 500 units
13 July Issued 300 units
24 July Purchased 500 units @ OMR 25 each
28 July Issued 400 units

Exercise No. 5
Following Information is given to you about Purchase of Inventory and Issues of Inventory for the Month
of January 2017. You are asked to determine the cost of inventory by Weighted Average Method at the
end of the January 2017.
Periodic Inventory System is maintained.

Inventory Valuation
Purchases

Date Units Rate Value


Jan-01 600 OMR 3
Jan-07 1000 OMR 4
Jan-30 900 OMR 5
Total Closing Stock/Inventory Value

Units Issued/Sold
Date Units
Jan-15 600
Jan-31 1200
Total Cost of Goods Sold

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Exercise No. 6
Apple & Co. provides you with the following information:

1.1.2017 Opening Stock 100 units @ OMR 1.00; 2.1.2017. Purchased 400 units @ OMR 1.50; 3.1.2017.
Issued 450 units; 4.1.2017. Purchased 500 units @ OMR 2.06; 5.1.2017 Issued 300 units.

Compute the Value of Inventory and Cost of Goods Sold as on 5.1.2017 assuming
(a) Perpetual System under FIFO Method.
(b) Periodic Inventory System under FIFO Method.
(c) Perpetual System under LIFO Method.
(d) Periodic Inventory System under LIFO Method.
(e) Weighted Average Method under Perpetual System
(f) Weighted Average Method under Periodic Inventory System

Exercise No. 7
FIFO and LIFO inventory methods.
During June, the following changes in inventory item 27 took place:
June 1 Balance 1,400 units @ OMR 24
14 Purchased 800 units @ OMR 36
24 Purchased 700 units @ OMR 30
8 Sold 400 units @ OMR 50
10 Sold 1,000 units @ OMR 40
29 Sold 500 units @ OMR 44
Periodic Inventory System are maintained.
What is the cost of the ending inventory, cost of goods sold and profit for item 27 under the following
methods? (Show calculations.) (a) FIFO (b) LIFO

Reference: Ramagopal, C.. Accounting for Managers, New Age International Pvt. Ltd., Publishers, 2009.
ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/dhofar-ebooks/detail.action?docID=437704.

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