From the following figures (A) calculate the closing stock in trade that would be shown using (i)FIFO (ii)LIFO (iii)AVCO methods on a PERPECTUAL inventory basis. (B)Then prepare an income statement using (i)FIFO (ii)LIFO (iii)AVCO .           Bought                                                               SoldJanuary     120 at $16each                         June                  125 at $22 eachApril          80 at $18 each                         November         210 at $25 eachOctober    150 at $19 each

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A:

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.