Inventory Valuation exercise (grid)

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1、InventoryValuation:ExampleofCostFlowAssumptionsInventoryMovements1.Companystartsoffwith1,000itemsininventory.Eachitemcost£1.00TotalCost£1,000.2.Buys600itemscosting£1.10each.Totalcost£6603.Sells800items.4.Buys500itemsat£1.20each.Totalcost£600.5.Sells900itemsAllsalesaremadeat£2.00peritemFi

2、rstin,firstout(FIFO):PerpetualPurchasesSales/IssuesatcostInventoryremainingQuantityUnitPriceValue£QuantityUnitPriceValue£QuantityValue£1,000£1,000600£1.10£6601,600£1,660800500£1.20£600900Lastin,firstout(LIFO):PerpetualPurchasesSales/IssuesatcostInventoryremainingQuantityUnitPriceValue£Qu

3、antityUnitPriceValue£QuantityValue£1,000£1,000600£1.10£6601,600£1,660800500£1.20£600900WeightedAverage(AVCO):PerpetualPurchasesSales/IssuesatcostInventoryremainingQuantityUnitPriceValue£QuantityUnitPriceValue£QuantityValue£1,000£1,000600£1.10£6601,600£1,660800500£1.20£600900SummaryFIFOLI

4、FOAVCOSalesRevenue£3,400£3,400£3,400CostofSales:Openinginventory£1,000£1,000£1,000Addpurchases£1,260£1,260£1,260£2,260£2,260£2,260LessclosinginventoryCostofsalesProfit