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FIFO

The document summarizes the First In First Out (FIFO) method for pricing material issues from a stores ledger. It provides an example ledger showing the opening stock, various purchases and issues of materials throughout January 2007. The ledger is updated with each transaction, maintaining separate balances for materials received at different unit prices. At the end of the period, the closing stock is valued at 1350 units costing Rs. 35,100 using the FIFO method, where the oldest materials are issued first based on receipt dates.

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Tamilselvi A
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288 views3 pages

FIFO

The document summarizes the First In First Out (FIFO) method for pricing material issues from a stores ledger. It provides an example ledger showing the opening stock, various purchases and issues of materials throughout January 2007. The ledger is updated with each transaction, maintaining separate balances for materials received at different unit prices. At the end of the period, the closing stock is valued at 1350 units costing Rs. 35,100 using the FIFO method, where the oldest materials are issued first based on receipt dates.

Uploaded by

Tamilselvi A
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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PRICING OF MATERIAL ISSUES

First in First out method [FIFO]


From the particulars given below write up the stores ledger card:
2007
January
1 Opening stock 1000 units at Rs. 26
5 Purchased 500 units at Rs.24.50 each
7 Issued 750 units
10 Purchased 1500 units at Rs. 25 each
12 Issued 1100 units
15 Purchased 1000 units at Rs. 25 each
17 Issued 500 units
18 Issued 300 units
25 Purchased 1500 units at Rs. 26 each
29 Issued 1500 units
Adopt the FIFO method if issue and ascertain the value of the closing stock
Store Ledger Account
FIFO Method
Receipts Issues Balance
Date Particulars
Units Rate Amount Units Rate Amount Units Rate Amount
2007
Jan 1 Balance b/d 1000 26.00 26000
5 G.R.N. No 500 24.50 12250 1000 26.00 26000
500 24.50 12250
7 M.R.No 750 26.00 19500 250 26.00 6500
500 24.50 12250
10 G.R.N. No 1500 24.00 36000 250 26.00 6500
500 24.50 12250
1500 24.00 36000
12 M.R. No 250 26.00 6500
500 24.50 12250 1150 24.00 27600
350 24.00 8400
1100
15 G.R.N. No 1000 25.00 25000 1150 24.00 27600
1000 25.00 25000
17 M.R. No 500 24.00 12000 650 24.00 15600
1000 25.00 25000
18 M.R. No 300 24.00 7200 350 24.00 8400
1000 25.00 25000
25 G.R.N. No 1500 26.00 39000 350 24.00 8400
1000 25.00 25000
1500 26.00 39000
29 M.R. No 350 24.00 8400
1000 25.00 25000
150 26.00 3900 1350 26.00 35100
1500

Closing stock = 1350 units at Rs. 26.00 each = 1350 x 26 = 35100


Note: G.R.N. No = Goods received note number
M.R. No = Material requisition Number

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