Cambrige AS and A Level Accounting Notes (9706)/ ZIMSECĀ  Advanced Accounting Level Notes: Inventory valuation: Inventory valuation methods: First In First Out (FIFO): Example Question

  • We have looked at the FIFO method of valuing inventory here
  • Now it is time to look at an exam type of question
  • The solution to this question can be found here

Mary Moyo

Mary Moyo operates a Sole Trader business trading as M M Toys where she buys and sells only one type of toy. On 1 January 20×7, MM Toys had opening inventory of 50 teddy bears at a purchase price of $30 each.

  • Her transactions for the first three months of 20×7 were:
DatePurchases(units)Purchase Price per unit ($)Sales (units)
Jan 830
Jan 1010030.00
Jan 1280
Jan 2112030.50
Jan 2890
Feb 150
Feb 1415031.00
Feb 23100
Mar 130
Mar 412031.50
Mar 19120
Mar 2310032.00
Mar 27120
  • No other transactions took place during the year
  • Each toy was sold for $50


  1. Calculate the value of the inventory at 31 March 20X7 using the FIFO method of valuation

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