Accounting Test Question SV No.1 on Stock Valuation Methodologies

November 9th, 2006 Comments off
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Accounting Test Question SV No.1:

Company XYZ uses a perpetual inventory system. Append below the following transaction relating to its merchandise inventory during the month of Nov’06

Date

Transaction

Nov 1

Inventory on hand – 3,000 units @ $8 each

Nov 1

Inventory on hand – 3,000 units @ $8 each

Nov 7

Bought 5,000 units for $8.40 each

Nov 13

Sold 4,000 units for $14.00 each

Nov 17

Bought 6,000 units for $8.20 each

Nov 24

Sold 7,000 units for $14.00 each

Nov 30

Inventory on hand -3000 units

Required:

Compute the inventory balance Company XYZ would report on its November 30 2006 balance sheet and the cost of goods sold for the period of November 2006 income statement using each of the following inventory methodology:

(1) First-in, first-out (FIFO)

(2) Last-in, first-out (LIFO)

(3) Average cost

[ Refer Answer ]

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