Page 97 - DCOM202_COST_ACCOUNTING_I

Unit 5: Methods of Valuing Material Issues

On 28 August 2 pipes issued on 20 July were received back. One 29 August, one pipe was Notes
th
th
th
found to be damaged and had to be discarded. Enter the above in the Stores Ledger Account
using the following methods of material issue:
(a) FIFO method, and
(b) LIFO method.

Solution:
(a) FIFO Method:

Stores Ledger Account
date Particulars Quantity Amount (`) Rate (`)
Received Issued Balance Received Issued Balance
2007
July 04 Iron pipes 20 – 20 300.00 – 300.00 15.00
purchased
July 17 Iron pipes 30 – 50 420.00 – 720.0 14.00
purchased
July 20 Iron pipes – 25 25 – 370.00 350.00 –
issued
Aug. 2 Iron pipes 40 – 65 580.00 – 930.00 14.50
purchased
Aug. 5 Iron pipes – 40 25 – 567.00 362.00 –
issued
Aug. 28 Iron pipes 2 – 27 28.00 – 390.00 14.00
transfer
Aug. 29 Iron pipe – 1 26 – 14.00 376.00 14.00
damages
Aug. 30 Iron pipes 30 – 56 390.00 – 766.00 13.00
purchased
Aug. 31 Iron pipes – 45 11 – 623.00 143.00 13.00
issued
(b) LIFO Method:

Stores Ledger Account
date Particulars Quantity Amount (`) Rate (`)
Received Issued Balance Received Issued Balance
2007 Iron pipes 20 – 20 300.00 – 300.00 15.00
July 04 purchased
July 17 Iron pipes 30 – 50 420.00 – 720.0 14.00
purchased
July 20 Iron pipes – 25 25 – 350.00 370.00 14.00
issued
Aug. 2 Iron pipes 40 – 65 580.00 –- 950.00 14.50
purchased
Aug. 5 Iron pipes – 40 25 – 580.00 370.00 14.50
issued
Aug. 28 Iron pipes 2 – 27 28.00 – 398.00 14.00
transfer

Contd…

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