Question 6
-
Eghosa started a business in April, selling maize.
The following are the details of his purchases and sales:
April N
4th purchases 100 bags @ 1,000 each
5th purchased 150 bags @ 1,100 each
8th sold 80 bags
13th sold 90 bags
20th purchased 70 bags @ 1,200 each
22nd sold 50 bags
25th sold 60 bags
28th purchased 90 bags @ 1,250 each
30th sold 50 bags
You are required to prepare a store ledger using FIFO method of pricing to show:(a)Cost of goods sold;
(b)Value of closing stock.
-
STORE LEDGER USING FIFO METHOD
DATE
RECEIPTS
ISSUE
BALANCE
QTY
PRICE
VALUE
QTY
PRICE
VALUE
QTY
VALUE
N
N
N
N
N
4/4
100
1,000
100,000
-
-
-
100
100,000
5/4
150
1,100
165,000
-
-
-
250
265,000
8/4
-
-
-
80
1,000
80,000
170
185,000
13/4
-
-
-
20
1,000
20,000
150
165,000
70
1,100
77,000
80
88,000
20/4
70
1,200
84,000
-
-
-
150
172,000
22/4
-
-
-
50
1,100
55,000
100
117,000
25/4
-
-
-
30
1,100
33,000
70
84,000
30
1,200
36,000
40
48,000
28/4
90
1,250
112,500
-
-
-
130
160,500
30/4
-
-
-
40
1,200
48,000
90
112,500
-
-
-
10
1,250
12,500
80
100,000
Total
410
461,500
330
361,500
- Cost of goods sold = N 361, 500
- Value of closing stock = N 100, 000
Observation
-
Candidates’ performance was okay. Most of them were not able to apply the principles of FIFO valuation method and getting the closing stock.