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Chapter 5: Accounting for Valuation of Stock 2014
1 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Accounting
Advance Certificate in Business
Administration – Study Notes & Practice
Questions
Chapter 5: Accounting for Valuation of
Stock
Chapter 5: Accounting for Valuation of Stock 2014
2 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Chapter 5: Accounting for Valuation of Stock 2014
3 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Chapter 5: Accounting for Valuation of Stock 2014
4 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Chapter 5: Accounting for Valuation of Stock 2014
5 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Chapter 5: Accounting for Valuation of Stock 2014
6 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Chapter 5: Accounting for Valuation of Stock 2014
7 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Chapter 5: Accounting for Valuation of Stock 2014
8 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Chapter 5: Accounting for Valuation of Stock 2014
9 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Chapter 5: Accounting for Valuation of Stock 2014
10 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Chapter 5: Accounting for Valuation of Stock 2014
11 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Chapter 5: Accounting for Valuation of Stock 2014
12 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Chapter 5: Accounting for Valuation of Stock 2014
13 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Chapter 5: Accounting for Valuation of Stock 2014
14 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
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Chapter 5: Accounting for Valuation of Stock 2014
15 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Practice Questions
Question 1
Essplate Ltd. sells a particular item of stock which had the following movements during 19X2.
4th
February Purchase 40 @ £10
6th
March Purchase 20 @ £12
8th
May Sale 22 @ £30
9th
Oct Purchase 10 @ £15
1st Dec Sale 35 @ £28
Required:
Calculate the value for closing stock assuming
(a) FIFO is used
(b) LIFO is used
(c) AVCO is used
Question 2
The following stock-related transactions occurred during the period 1 July to 31 December.
Date Transaction
25 July Purchased 150 units of stock @ £20 each
28 August Purchased 225 units of stock @ £30 each
15 September Sold 305 units of stock @ £45 each
4 October Sold 50 units of stock @ £45 each
10 November Purchased 410 units of stock @ £40 each
23 December Sold 100 units of stock @ £75 each
Required:
Calculate the value for closing stock assuming
(a) FIFO is used
(b) LIFO is used
(c) AVCO is used
Chapter 5: Accounting for Valuation of Stock 2014
16 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Question 3
From the following figures calculate the closing stock-in-trade that would be shown using (i) FIFO, (ii)
LIFO, (iii) AVCO methods.
Bought Sold
January 10 at £30 each April 8 for £46 each
March 10 at £34 each December 12 for £56 each
September 20 at £40 each
Question 4
A business has the following transactions in January:
On January 1st there were 500 units of opening inventory valued at a total of £5,000.
On January 8th
they purchased 600 units for £11 per unit.
On January 17th
they purchased 900 units for a total of £10,800.
On January 24th
they issued 1,800 units from inventory.
On January 28th
they purchased 800 units for £13 per unit.
Calculate both the value of the issue on January 24th
and the value of the closing inventory on January
31st
using each of FIFO, LIFO and AVCO.
Chapter 5: Accounting for Valuation of Stock 2014
17 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Question 5
Chapter 5: Accounting for Valuation of Stock 2014
18 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Chapter 5: Accounting for Valuation of Stock 2014
19 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Question 6
Chapter 5: Accounting for Valuation of Stock 2014
20 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Question 7
Chapter 5: Accounting for Valuation of Stock 2014
21 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Question 8
Chapter 5: Accounting for Valuation of Stock 2014
22 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Chapter 5: Accounting for Valuation of Stock 2014
23 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Question 9
Question 10
Chapter 5: Accounting for Valuation of Stock 2014
24 Ibrahim Sameer Advance Certificate in Business Administration (ACCG – AVID College)
Question 11
