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 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)|
- No other transactions took place during the year
- Each toy was sold for $50
- Calculate the value of the inventory at 31 March 20X7 using the LIFO method of valuation
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