Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC Advanced Accounting Level Notes: Inventory valuation: Inventory valuation methods: Last In First Out (LIFO): Example Question
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- We have looked at the LIFO 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 $30 each.
- Her transactions for the first three months of 20×7 were:
| Date | Purchases(units) | Purchase Price per unit ($) | Sales (units) |
| Jan 8 | 30 | ||
| Jan 10 | 100 | 30.00 | |
| Jan 12 | 80 | ||
| Jan 21 | 120 | 30.50 | |
| Jan 28 | 90 | ||
| Feb 1 | 50 | ||
| Feb 14 | 150 | 31.00 | |
| Feb 23 | 100 | ||
| Mar 1 | 30 | ||
| Mar 4 | 120 | 31.50 | |
| Mar 19 | 120 | ||
| Mar 23 | 100 | 32.00 | |
| Mar 27 | 120 |
- No other transactions took place during the year
- Each toy was sold for $50
Required:
- Calculate the value of the inventory at 31 March 20X7 using the LIFO method of valuation
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