Question Tag: FIFO

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  • 20 Marks

MI – Nov 2015 – L1 – SB – Q3 – Accounting for Cost Elements

Determines inventory balance using FIFO and weighted average pricing methods.

A company located in Ijora area of Lagos extracted the following figures from its materials analysis sheet:

Date Transaction Quantity Unit price (N)
1st January Balance b/f 10,000 50
25th January Receipt 7,000 55
6th February Issue 14,000 –
3rd March Receipt 5,000 60
27th March Receipt 4,500 62
4th June Issue 7,500 –
24th June Issue 2,500 –
30th June Receipt 6,500 65

You are required to record the above transactions in the inventory ledger and determine the value of the inventory balance at the end of June 2015 using:
a. First-in-First-out pricing method. (10 Marks)
b. Weighted average pricing method. (10 Marks)

(Total 20 Marks)

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  • 20 Marks

MI – Nov 2015 – L1 – SB – Q3 – Accounting for Cost Elements

Determines inventory balance using FIFO and weighted average pricing methods.

A company located in Ijora area of Lagos extracted the following figures from its materials analysis sheet:

Date Transaction Quantity Unit price (N)
1st January Balance b/f 10,000 50
25th January Receipt 7,000 55
6th February Issue 14,000 –
3rd March Receipt 5,000 60
27th March Receipt 4,500 62
4th June Issue 7,500 –
24th June Issue 2,500 –
30th June Receipt 6,500 65

You are required to record the above transactions in the inventory ledger and determine the value of the inventory balance at the end of June 2015 using:
a. First-in-First-out pricing method. (10 Marks)
b. Weighted average pricing method. (10 Marks)

(Total 20 Marks)

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  • 14 Marks

MI – May 2021 – L1 – SB – Q3a – Accounting for Cost Elements

Calculate closing inventory and issued materials values using FIFO and LIFO methods.

Koloko Wakama Plc trades in farm feeds. The following information relates to the movement of inventory for the month of June 2019:

Date Units Cost/Unit
June 6 20,000 N10.00
June 16 15,000 N12.50
June 26 30,000 N15.00

The following issues were made to the production floor from the store department:

Date Units
June 8 8,000
June 18 10,000
June 24 6,000
June 29 20,000

You are required to:
a. Determine the value of closing inventory and the value of the materials issued as at the end of June 2019 using:
i. First-in-first-out (FIFO) method (7 Marks)
ii. Last-in-first-out (LIFO) method (7 Marks)

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  • 14 Marks

MI – May 2021 – L1 – SB – Q3a – Accounting for Cost Elements

Calculate closing inventory and issued materials values using FIFO and LIFO methods.

Koloko Wakama Plc trades in farm feeds. The following information relates to the movement of inventory for the month of June 2019:

Date Units Cost/Unit
June 6 20,000 N10.00
June 16 15,000 N12.50
June 26 30,000 N15.00

The following issues were made to the production floor from the store department:

Date Units
June 8 8,000
June 18 10,000
June 24 6,000
June 29 20,000

You are required to:
a. Determine the value of closing inventory and the value of the materials issued as at the end of June 2019 using:
i. First-in-first-out (FIFO) method (7 Marks)
ii. Last-in-first-out (LIFO) method (7 Marks)

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  • 1 Marks

FA – Nov 2023 – L1 – SA – Q7 – Accounting for Inventories in Accordance with IAS 2

Calculate closing inventory using the FIFO method.

Using the First-In-First-Out (FIFO) method, what is the value of the closing inventory after the company issued 500 units?

  • A. ₦37,000
  • B. ₦37,500
  • C. ₦38,750
  • D. ₦42,500
  • E. ₦45,000

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  • 1 Marks

FA – Nov 2023 – L1 – SA – Q7 – Accounting for Inventories in Accordance with IAS 2

Calculate closing inventory using the FIFO method.

Using the First-In-First-Out (FIFO) method, what is the value of the closing inventory after the company issued 500 units?

  • A. ₦37,000
  • B. ₦37,500
  • C. ₦38,750
  • D. ₦42,500
  • E. ₦45,000

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  • 1 Marks

MI – May 2023 – L1 – SA – Q10 – Costing Methods

This question asks about the effect of FIFO on closing stock value and profit when prices are rising.

When prices are rising, FIFO method will provide:
A. Highest value of closing stock but lowest profit
B. Highest value of profit but lowest value of closing stock
C. Highest value of closing stock and profit
D. Lowest value of closing stock and profit
E. Same value of closing stock and profit

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  • 1 Marks

MI – May 2023 – L1 – SA – Q10 – Costing Methods

This question asks about the effect of FIFO on closing stock value and profit when prices are rising.

When prices are rising, FIFO method will provide:
A. Highest value of closing stock but lowest profit
B. Highest value of profit but lowest value of closing stock
C. Highest value of closing stock and profit
D. Lowest value of closing stock and profit
E. Same value of closing stock and profit

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  • 20 Marks

MI – May 2024 – L1 – SB – Q3 – Costing Methods

Compute the price of store issues and the value of closing stocks using FIFO and LIFO methods.

From the information given below, you are required to compute the price of store issues and the value of closing stocks using:
i. First-In-First-Out (FIFO) basis
ii. Last-In-First-Out (LIFO) basis

  • January 2nd: Purchased 500 Units of XYZ at N40 per unit
  • January 7th: Purchased 200 Units at N45 per unit
  • January 10th: Issued 300 Units
  • January 12th: Purchased 350 Units at N42 per unit
  • January 15th: Issued 500 Units
  • January 18th: Purchased 200 Units at N38 per unit

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  • 20 Marks

MI – May 2024 – L1 – SB – Q3 – Costing Methods

Compute the price of store issues and the value of closing stocks using FIFO and LIFO methods.

From the information given below, you are required to compute the price of store issues and the value of closing stocks using:
i. First-In-First-Out (FIFO) basis
ii. Last-In-First-Out (LIFO) basis

  • January 2nd: Purchased 500 Units of XYZ at N40 per unit
  • January 7th: Purchased 200 Units at N45 per unit
  • January 10th: Issued 300 Units
  • January 12th: Purchased 350 Units at N42 per unit
  • January 15th: Issued 500 Units
  • January 18th: Purchased 200 Units at N38 per unit

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  • 20 Marks

IMAC – NOV 2023 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis

Calculate closing inventory using FIFO and compute direct material price and usage variances for Prekese and Kakaduro.

a) The following data has been extracted from the books of ABC Ltd for the month of October 2023.

Date Description
2/10/2023 Bought 200 units @ GH₵100 per unit
5/10/2023 Bought 150 units @ GH₵120 per unit
8/10/2023 Issued 120 units
12/10/2023 Bought 100 units @ GH₵90 per unit
20/10/2023 Issued 140 units
24/10/2023 Bought 300 units @ GH₵150 per unit
28/10/2023 Issued 210 units

Required:
Using the FIFO method, calculate the value of the closing inventory. (10 marks)

b) Identify FOUR (4) pieces of information that can be seen on an invoice. (5 marks)

c) Preka body lotion is a product produced from the combination of two materials: prekese and kakaduro. Preka body lotion has a standard direct material cost as follows:

Material Quantity (kg) Cost per kg (GH₵) Total Cost (GH₵)
Prekese 6 15 90
Kakaduro 10 10 100

During period one, 1,000 units of Preka body lotion were manufactured, using 11,700 kilograms of prekese and 10,000 kilograms of kakaduro, costing GH₵98,600 and GH₵78,000 respectively.

Required:
Calculate the following variances for prekese and kakaduro:
i) The direct material price variance (2.5 marks)
ii) The direct material usage variance (2.5 marks)

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  • 20 Marks

IMAC – NOV 2023 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis

Calculate closing inventory using FIFO and compute direct material price and usage variances for Prekese and Kakaduro.

a) The following data has been extracted from the books of ABC Ltd for the month of October 2023.

Date Description
2/10/2023 Bought 200 units @ GH₵100 per unit
5/10/2023 Bought 150 units @ GH₵120 per unit
8/10/2023 Issued 120 units
12/10/2023 Bought 100 units @ GH₵90 per unit
20/10/2023 Issued 140 units
24/10/2023 Bought 300 units @ GH₵150 per unit
28/10/2023 Issued 210 units

Required:
Using the FIFO method, calculate the value of the closing inventory. (10 marks)

b) Identify FOUR (4) pieces of information that can be seen on an invoice. (5 marks)

c) Preka body lotion is a product produced from the combination of two materials: prekese and kakaduro. Preka body lotion has a standard direct material cost as follows:

Material Quantity (kg) Cost per kg (GH₵) Total Cost (GH₵)
Prekese 6 15 90
Kakaduro 10 10 100

During period one, 1,000 units of Preka body lotion were manufactured, using 11,700 kilograms of prekese and 10,000 kilograms of kakaduro, costing GH₵98,600 and GH₵78,000 respectively.

Required:
Calculate the following variances for prekese and kakaduro:
i) The direct material price variance (2.5 marks)
ii) The direct material usage variance (2.5 marks)

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  • 20 Marks

FA – Nov 2017 – L1 – Q2 – Inventory

Calculation of inventory value, cost of sales, gross profit, net profit, and net assets for Adepa Ltd, using FIFO method and interpretation of IAS 2.

 

You took over from a Trainee Accountant after he had prepared a draft account for the year ended 31 December 2016. A careful examination of the Income Statement revealed the following:

i) There is no figure for closing inventory. However, the December 31, 2015 Statement of Financial Position has a figure of GH¢60,000 as closing inventory value. The closing stock was valued on First In, First Out (FIFO) basis. There were 600 items, valued at GH¢100 per item.

ii) Purchases during the year were:

Date Number of Items Cost per item (GH¢)
01/03/2016 1,600 110
01/06/2016 2,500 120
01/09/2016 3,500 130
01/12/2016 4,000 140

iii) Sales during the year were:

Date Number of Items Price per item (GH¢)
01/02/2016 400 210
01/05/2016 1,000 200
01/08/2016 2,000 215
03/12/2016 4,000 250

iv) Other costs captured in the books of Account during the year 2016 were:

Cost Description Amount (GH¢)
Staff cost 55,000
Rent of premises 47,500
Administrative Expenses 23,500
Marketing cost 44,200
Carriage inwards 5,100
Carriage outwards 6,200
Depreciation 13,500

195,000

Required:
a) Calculate
i) The number of items in inventory at 31/12/2016. (2 marks)
ii) The value of inventory at 31/12/2016 on FIFO basis. (2 marks)

b) Using the revised inventory value calculated in (a) above, calculate
i) Cost of sales for 31/12/2016 (3 marks)
ii) Gross Profit for 31/12/2016 (2 marks)
iii) Net Profit for 31/12/2016 (2 marks)
iv) Net Assets for 31/12/2016 if the figure prepared by the Trainee Accountant was GH¢96,500. (2 marks)

c) State the basic rule set out in IAS 2 – Inventories, which is to be applied to the valuation of inventory. (2 marks)

d) Describe how a business would verify the quantity of inventory held at the year end. (5 marks)

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  • 20 Marks

FA – Nov 2017 – L1 – Q2 – Inventory

Calculation of inventory value, cost of sales, gross profit, net profit, and net assets for Adepa Ltd, using FIFO method and interpretation of IAS 2.

 

You took over from a Trainee Accountant after he had prepared a draft account for the year ended 31 December 2016. A careful examination of the Income Statement revealed the following:

i) There is no figure for closing inventory. However, the December 31, 2015 Statement of Financial Position has a figure of GH¢60,000 as closing inventory value. The closing stock was valued on First In, First Out (FIFO) basis. There were 600 items, valued at GH¢100 per item.

ii) Purchases during the year were:

Date Number of Items Cost per item (GH¢)
01/03/2016 1,600 110
01/06/2016 2,500 120
01/09/2016 3,500 130
01/12/2016 4,000 140

iii) Sales during the year were:

Date Number of Items Price per item (GH¢)
01/02/2016 400 210
01/05/2016 1,000 200
01/08/2016 2,000 215
03/12/2016 4,000 250

iv) Other costs captured in the books of Account during the year 2016 were:

Cost Description Amount (GH¢)
Staff cost 55,000
Rent of premises 47,500
Administrative Expenses 23,500
Marketing cost 44,200
Carriage inwards 5,100
Carriage outwards 6,200
Depreciation 13,500

195,000

Required:
a) Calculate
i) The number of items in inventory at 31/12/2016. (2 marks)
ii) The value of inventory at 31/12/2016 on FIFO basis. (2 marks)

b) Using the revised inventory value calculated in (a) above, calculate
i) Cost of sales for 31/12/2016 (3 marks)
ii) Gross Profit for 31/12/2016 (2 marks)
iii) Net Profit for 31/12/2016 (2 marks)
iv) Net Assets for 31/12/2016 if the figure prepared by the Trainee Accountant was GH¢96,500. (2 marks)

c) State the basic rule set out in IAS 2 – Inventories, which is to be applied to the valuation of inventory. (2 marks)

d) Describe how a business would verify the quantity of inventory held at the year end. (5 marks)

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  • 20 Marks

MI – Nov 2015 – L1 – SB – Q3 – Accounting for Cost Elements

Determines inventory balance using FIFO and weighted average pricing methods.

A company located in Ijora area of Lagos extracted the following figures from its materials analysis sheet:

Date Transaction Quantity Unit price (N)
1st January Balance b/f 10,000 50
25th January Receipt 7,000 55
6th February Issue 14,000 –
3rd March Receipt 5,000 60
27th March Receipt 4,500 62
4th June Issue 7,500 –
24th June Issue 2,500 –
30th June Receipt 6,500 65

You are required to record the above transactions in the inventory ledger and determine the value of the inventory balance at the end of June 2015 using:
a. First-in-First-out pricing method. (10 Marks)
b. Weighted average pricing method. (10 Marks)

(Total 20 Marks)

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  • 20 Marks

MI – Nov 2015 – L1 – SB – Q3 – Accounting for Cost Elements

Determines inventory balance using FIFO and weighted average pricing methods.

A company located in Ijora area of Lagos extracted the following figures from its materials analysis sheet:

Date Transaction Quantity Unit price (N)
1st January Balance b/f 10,000 50
25th January Receipt 7,000 55
6th February Issue 14,000 –
3rd March Receipt 5,000 60
27th March Receipt 4,500 62
4th June Issue 7,500 –
24th June Issue 2,500 –
30th June Receipt 6,500 65

You are required to record the above transactions in the inventory ledger and determine the value of the inventory balance at the end of June 2015 using:
a. First-in-First-out pricing method. (10 Marks)
b. Weighted average pricing method. (10 Marks)

(Total 20 Marks)

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  • 14 Marks

MI – May 2021 – L1 – SB – Q3a – Accounting for Cost Elements

Calculate closing inventory and issued materials values using FIFO and LIFO methods.

Koloko Wakama Plc trades in farm feeds. The following information relates to the movement of inventory for the month of June 2019:

Date Units Cost/Unit
June 6 20,000 N10.00
June 16 15,000 N12.50
June 26 30,000 N15.00

The following issues were made to the production floor from the store department:

Date Units
June 8 8,000
June 18 10,000
June 24 6,000
June 29 20,000

You are required to:
a. Determine the value of closing inventory and the value of the materials issued as at the end of June 2019 using:
i. First-in-first-out (FIFO) method (7 Marks)
ii. Last-in-first-out (LIFO) method (7 Marks)

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  • 14 Marks

MI – May 2021 – L1 – SB – Q3a – Accounting for Cost Elements

Calculate closing inventory and issued materials values using FIFO and LIFO methods.

Koloko Wakama Plc trades in farm feeds. The following information relates to the movement of inventory for the month of June 2019:

Date Units Cost/Unit
June 6 20,000 N10.00
June 16 15,000 N12.50
June 26 30,000 N15.00

The following issues were made to the production floor from the store department:

Date Units
June 8 8,000
June 18 10,000
June 24 6,000
June 29 20,000

You are required to:
a. Determine the value of closing inventory and the value of the materials issued as at the end of June 2019 using:
i. First-in-first-out (FIFO) method (7 Marks)
ii. Last-in-first-out (LIFO) method (7 Marks)

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  • 1 Marks

FA – Nov 2023 – L1 – SA – Q7 – Accounting for Inventories in Accordance with IAS 2

Calculate closing inventory using the FIFO method.

Using the First-In-First-Out (FIFO) method, what is the value of the closing inventory after the company issued 500 units?

  • A. ₦37,000
  • B. ₦37,500
  • C. ₦38,750
  • D. ₦42,500
  • E. ₦45,000

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  • 1 Marks

FA – Nov 2023 – L1 – SA – Q7 – Accounting for Inventories in Accordance with IAS 2

Calculate closing inventory using the FIFO method.

Using the First-In-First-Out (FIFO) method, what is the value of the closing inventory after the company issued 500 units?

  • A. ₦37,000
  • B. ₦37,500
  • C. ₦38,750
  • D. ₦42,500
  • E. ₦45,000

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  • 1 Marks

MI – May 2023 – L1 – SA – Q10 – Costing Methods

This question asks about the effect of FIFO on closing stock value and profit when prices are rising.

When prices are rising, FIFO method will provide:
A. Highest value of closing stock but lowest profit
B. Highest value of profit but lowest value of closing stock
C. Highest value of closing stock and profit
D. Lowest value of closing stock and profit
E. Same value of closing stock and profit

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  • 1 Marks

MI – May 2023 – L1 – SA – Q10 – Costing Methods

This question asks about the effect of FIFO on closing stock value and profit when prices are rising.

When prices are rising, FIFO method will provide:
A. Highest value of closing stock but lowest profit
B. Highest value of profit but lowest value of closing stock
C. Highest value of closing stock and profit
D. Lowest value of closing stock and profit
E. Same value of closing stock and profit

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  • 20 Marks

MI – May 2024 – L1 – SB – Q3 – Costing Methods

Compute the price of store issues and the value of closing stocks using FIFO and LIFO methods.

From the information given below, you are required to compute the price of store issues and the value of closing stocks using:
i. First-In-First-Out (FIFO) basis
ii. Last-In-First-Out (LIFO) basis

  • January 2nd: Purchased 500 Units of XYZ at N40 per unit
  • January 7th: Purchased 200 Units at N45 per unit
  • January 10th: Issued 300 Units
  • January 12th: Purchased 350 Units at N42 per unit
  • January 15th: Issued 500 Units
  • January 18th: Purchased 200 Units at N38 per unit

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  • 20 Marks

MI – May 2024 – L1 – SB – Q3 – Costing Methods

Compute the price of store issues and the value of closing stocks using FIFO and LIFO methods.

From the information given below, you are required to compute the price of store issues and the value of closing stocks using:
i. First-In-First-Out (FIFO) basis
ii. Last-In-First-Out (LIFO) basis

  • January 2nd: Purchased 500 Units of XYZ at N40 per unit
  • January 7th: Purchased 200 Units at N45 per unit
  • January 10th: Issued 300 Units
  • January 12th: Purchased 350 Units at N42 per unit
  • January 15th: Issued 500 Units
  • January 18th: Purchased 200 Units at N38 per unit

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  • 20 Marks

IMAC – NOV 2023 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis

Calculate closing inventory using FIFO and compute direct material price and usage variances for Prekese and Kakaduro.

a) The following data has been extracted from the books of ABC Ltd for the month of October 2023.

Date Description
2/10/2023 Bought 200 units @ GH₵100 per unit
5/10/2023 Bought 150 units @ GH₵120 per unit
8/10/2023 Issued 120 units
12/10/2023 Bought 100 units @ GH₵90 per unit
20/10/2023 Issued 140 units
24/10/2023 Bought 300 units @ GH₵150 per unit
28/10/2023 Issued 210 units

Required:
Using the FIFO method, calculate the value of the closing inventory. (10 marks)

b) Identify FOUR (4) pieces of information that can be seen on an invoice. (5 marks)

c) Preka body lotion is a product produced from the combination of two materials: prekese and kakaduro. Preka body lotion has a standard direct material cost as follows:

Material Quantity (kg) Cost per kg (GH₵) Total Cost (GH₵)
Prekese 6 15 90
Kakaduro 10 10 100

During period one, 1,000 units of Preka body lotion were manufactured, using 11,700 kilograms of prekese and 10,000 kilograms of kakaduro, costing GH₵98,600 and GH₵78,000 respectively.

Required:
Calculate the following variances for prekese and kakaduro:
i) The direct material price variance (2.5 marks)
ii) The direct material usage variance (2.5 marks)

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  • 20 Marks

IMAC – NOV 2023 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis

Calculate closing inventory using FIFO and compute direct material price and usage variances for Prekese and Kakaduro.

a) The following data has been extracted from the books of ABC Ltd for the month of October 2023.

Date Description
2/10/2023 Bought 200 units @ GH₵100 per unit
5/10/2023 Bought 150 units @ GH₵120 per unit
8/10/2023 Issued 120 units
12/10/2023 Bought 100 units @ GH₵90 per unit
20/10/2023 Issued 140 units
24/10/2023 Bought 300 units @ GH₵150 per unit
28/10/2023 Issued 210 units

Required:
Using the FIFO method, calculate the value of the closing inventory. (10 marks)

b) Identify FOUR (4) pieces of information that can be seen on an invoice. (5 marks)

c) Preka body lotion is a product produced from the combination of two materials: prekese and kakaduro. Preka body lotion has a standard direct material cost as follows:

Material Quantity (kg) Cost per kg (GH₵) Total Cost (GH₵)
Prekese 6 15 90
Kakaduro 10 10 100

During period one, 1,000 units of Preka body lotion were manufactured, using 11,700 kilograms of prekese and 10,000 kilograms of kakaduro, costing GH₵98,600 and GH₵78,000 respectively.

Required:
Calculate the following variances for prekese and kakaduro:
i) The direct material price variance (2.5 marks)
ii) The direct material usage variance (2.5 marks)

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You're reporting an error for "IMAC – NOV 2023 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis"

  • 20 Marks

FA – Nov 2017 – L1 – Q2 – Inventory

Calculation of inventory value, cost of sales, gross profit, net profit, and net assets for Adepa Ltd, using FIFO method and interpretation of IAS 2.

 

You took over from a Trainee Accountant after he had prepared a draft account for the year ended 31 December 2016. A careful examination of the Income Statement revealed the following:

i) There is no figure for closing inventory. However, the December 31, 2015 Statement of Financial Position has a figure of GH¢60,000 as closing inventory value. The closing stock was valued on First In, First Out (FIFO) basis. There were 600 items, valued at GH¢100 per item.

ii) Purchases during the year were:

Date Number of Items Cost per item (GH¢)
01/03/2016 1,600 110
01/06/2016 2,500 120
01/09/2016 3,500 130
01/12/2016 4,000 140

iii) Sales during the year were:

Date Number of Items Price per item (GH¢)
01/02/2016 400 210
01/05/2016 1,000 200
01/08/2016 2,000 215
03/12/2016 4,000 250

iv) Other costs captured in the books of Account during the year 2016 were:

Cost Description Amount (GH¢)
Staff cost 55,000
Rent of premises 47,500
Administrative Expenses 23,500
Marketing cost 44,200
Carriage inwards 5,100
Carriage outwards 6,200
Depreciation 13,500

195,000

Required:
a) Calculate
i) The number of items in inventory at 31/12/2016. (2 marks)
ii) The value of inventory at 31/12/2016 on FIFO basis. (2 marks)

b) Using the revised inventory value calculated in (a) above, calculate
i) Cost of sales for 31/12/2016 (3 marks)
ii) Gross Profit for 31/12/2016 (2 marks)
iii) Net Profit for 31/12/2016 (2 marks)
iv) Net Assets for 31/12/2016 if the figure prepared by the Trainee Accountant was GH¢96,500. (2 marks)

c) State the basic rule set out in IAS 2 – Inventories, which is to be applied to the valuation of inventory. (2 marks)

d) Describe how a business would verify the quantity of inventory held at the year end. (5 marks)

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  • 20 Marks

FA – Nov 2017 – L1 – Q2 – Inventory

Calculation of inventory value, cost of sales, gross profit, net profit, and net assets for Adepa Ltd, using FIFO method and interpretation of IAS 2.

 

You took over from a Trainee Accountant after he had prepared a draft account for the year ended 31 December 2016. A careful examination of the Income Statement revealed the following:

i) There is no figure for closing inventory. However, the December 31, 2015 Statement of Financial Position has a figure of GH¢60,000 as closing inventory value. The closing stock was valued on First In, First Out (FIFO) basis. There were 600 items, valued at GH¢100 per item.

ii) Purchases during the year were:

Date Number of Items Cost per item (GH¢)
01/03/2016 1,600 110
01/06/2016 2,500 120
01/09/2016 3,500 130
01/12/2016 4,000 140

iii) Sales during the year were:

Date Number of Items Price per item (GH¢)
01/02/2016 400 210
01/05/2016 1,000 200
01/08/2016 2,000 215
03/12/2016 4,000 250

iv) Other costs captured in the books of Account during the year 2016 were:

Cost Description Amount (GH¢)
Staff cost 55,000
Rent of premises 47,500
Administrative Expenses 23,500
Marketing cost 44,200
Carriage inwards 5,100
Carriage outwards 6,200
Depreciation 13,500

195,000

Required:
a) Calculate
i) The number of items in inventory at 31/12/2016. (2 marks)
ii) The value of inventory at 31/12/2016 on FIFO basis. (2 marks)

b) Using the revised inventory value calculated in (a) above, calculate
i) Cost of sales for 31/12/2016 (3 marks)
ii) Gross Profit for 31/12/2016 (2 marks)
iii) Net Profit for 31/12/2016 (2 marks)
iv) Net Assets for 31/12/2016 if the figure prepared by the Trainee Accountant was GH¢96,500. (2 marks)

c) State the basic rule set out in IAS 2 – Inventories, which is to be applied to the valuation of inventory. (2 marks)

d) Describe how a business would verify the quantity of inventory held at the year end. (5 marks)

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