Consider the following information Date Particulars Units Rate per unit Rs ...........

General Accounting Principles Others

Consider the following information :

Which one of the following is the value of inventoy on January 31 under perpetual inventory system using First-In-First-Out (FIFO) method ?

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EPFO EO AO 2023

Rs 6,700

Rs 8,700

Rs 10,700

Rs 12,000

- Let's track inventory step-by-step using FIFO under a perpetual system:

- Opening inventory (Jan 1): 200 units @ Rs 7 = Rs 1,400

- Purchase (Jan 8): 1,100 units @ Rs 8 = Rs 8,800

- Purchase (Jan 25): 300 units @ Rs 9 = Rs 2,700

- Issues:

- Jan 6: Issue 100 units (from opening stock @ Rs 7) = 200 - 100 left = 100 units @ Rs 7 remain

- Jan 9: Issue 200 units

- 100 units @ Rs 7 (now opening stock exhausted)

- 100 units @ Rs 8 (from first purchase)

- Inventory after all transactions:

- After Jan 9, units left =

- (1,100 - 100 from purchase) = 1,000 units @ Rs 8

- 300 units @ Rs 9 (untouched)

- Total units on hand: 1,000 + 300 = 1,300 units

- Value: (1,000 × 8) + (300 × 9) = Rs 8,000 + Rs 2,700 = Rs 10,700

- Option 3: Rs 10,700 is correct

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