MH Pte Ltd is one of the distributors for Coke. The following information relates to transactions that have affected its stock of Coke during the month of December 20X1:Now, assuming the perpetual inventory system, compute the ending balance of inventory as at 31 December 20X1 and cost of goods sold during the month of December under the following methods: (i) First-In, First-Out (FIFO) Method
MH Pte Ltd is one of the
distributors for Coke. The following information relates to transactions that
have affected its stock of Coke during the month of December 20X1:Now, assuming the perpetual inventory system, compute the ending balance of
inventory as at 31 December 20X1 and cost of goods sold during the month of
December under the following methods:
(i) First-In, First-Out (FIFO) Method
The inventory valuation methods value the inventory on different basis like FIFO, LIFO and weighted average. Under perpetual inventory method, the inventory is valued after each transaction.In other words, the inventory records are updated on continuous basis.
The FIFO method assumes the first purchase to be sold firstly while LIFO considers the latest purchase to be sold firstly.
The weighted average method values the inventory on the basis of weighted average rate.
Step by step
Solved in 4 steps with 2 images
