Home > Education-Training, Financial Accounting, Financial Statement Analysis > FIFO, LIFO and Average Closing Stock Costing by Perpetual and Periodic Example

FIFO, LIFO and Average Closing Stock Costing by Perpetual and Periodic Example

Problem

Accounts of ABC Ltd as on 31st Dec, 1997

Dec, 1997

1

Opening Stock 300 Units @ Rs. 9.70

3

Purchases 250 Units @ Rs. 9.80

11

Issues 400 Units

15

Purchases 300 Units @ Rs. 10.05

20

Issues 210 Units

25

Purchases 150 Units @ Rs. 10.30

26

Issues 100 Units

Work out the value of closing stock under the following methods of pricing

  1. FIFO (Perpetual)
  2. LIFO (Perpetual)
  3. Weighted Average (Perpetual)
  4. FIFO (Periodic)
  5. LIFO ((Periodic)
  6. Weighted Average (Periodic)

Solution

FIFO (Perpetual)

Date

Purchase

Issues

Balance

Dec, 1997

Qty

Rate

Value

Qty

Rate

Value

Qty

Rate

Value

1

300

9.7

2910

3

250

9.8

2450

300

9.7

2910

250

9.8

2450

11

300

9.7

2910

150

9.8

1470

100

9.8

980

0

15

300

10.05

3015

150

9.8

1470

0

300

10.05

3015

20

0

150

9.8

1470

240

10.05

2412

0

60

10.05

603

0

25

150

10.3

1545

240

10.05

2412

0

150

10.3

1545

26

0

100

10.05

1005

140

10.05

1407

0

150

10.3

1545

Value of Closing Stock

290

2952

LIFO (Perpetual)

Date

Purchase

Issues

Balance

Dec, 1997

Qty

Rate

Value

Qty

Rate

Value

Qty

Rate

Value

1

300

9.7

2910

3

250

9.8

2450

300

9.7

2910

250

9.8

2450

11

250

9.8

2450

150

9.7

1455

150

9.7

1455

15

300

10.05

3015

150

9.7

1455

300

10.05

3015

20

210

10.05

2110.5

150

9.7

1455

90

10.05

904.5

25

150

10.3

1545

150

9.7

1455

90

10.05

904.5

150

10.3

1545

26

100

10.3

1030

150

9.7

1455

90

10.05

904.5

50

10.3

515

Value of Closing Stock

290

2874.5

Weighted Average (Perpetual)

Date

Purchase

Issues

Balance

Dec, 1997

Qty

Rate

Value

Qty

Rate

Value

Qty

Rate

Value

1

300

9.7

2910

3

250

9.8

2450

550

9.74

5360

11

400

9.74

3898.182

150

9.74

1461.81

15

300

10.05

3015

450

9.94

4476.81

20

210

9.94

2089.182

240

9.94

2387.63

25

150

10.3

1545

390

10.08

3932.63

26

100

10.08

1008.368

290

10.08

2924.26

Value of Closing Stock

FIFO (Periodic)

Qty

Dec, 1997

Purchase

Issue

Balance

1

300

3

250

550

11

400

150

15

300

450

20

210

240

25

150

390

26

100

290

Qty

Unit Price FIFO

Value

Cost per unit of FIRST Purchase

290

9.7

2813

Value of closing stock

290

2813

LIFO ((Periodic)

Qty

Dec, 1997

Purchase

Issue

Balance

1

300

3

250

550

11

400

150

15

300

450

20

210

240

25

150

390

26

100

290

Qty

Unit Price

LIFO

Value

Cost per unit of LAST Purchase

150

10.05

1507.5

140

10.3

1442

Value of closing stock

290

2949.5

Weighted Average (Periodic)

Opening Inventories + Purchases (in amounts)= 9920

Opening Inventories + Purchases (in units)= 1000

Qty

Dec, 1997

Purchase

Issue

Balance

1

300

3

250

550

11

400

150

15

300

450

20

210

240

25

150

390

26

100

290

Avg Cost per unit

9.92

Value of closing stock

2876.8

Value of Closing Stock

Perpetual

Periodic

FIFO

2952.00

2813.00

LIFO

2874.50

2949.50

AVG

2924.27

2876.80

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