ACCA FA2 INVENTORY VALUE 2
At 1 January 20X3 Wasan had 700 units of a particular item in inventory. These were valued at $500 per unit. During January, the purchase and sales of the item were:
| Date | Units | Price per unit | Sales (units) |
| 5 Jan | 350 | ||
| 10 Jan | 900 | 450 | |
| 17 Jan | 300 | ||
| 22 Jan | 400 | 405 | |
| 28 Jan | 100 |
Wasan values inventory on the periodic weighted average basis.
What is the value of Wasan's inventory at 31 January 20X3 (to the nearest $1)?
Suggested Solution.
No of units available for sales
= 700 + 900 +400
=2000
No of units sold during the month
=350 +300 +100
=750
No of units at the end of the month
= 2000 -750
=1250 Units
Periodic weighted average rate computation
| Date | Units | Price per unit | Value |
| 1 Jan | 700 | 500 | 350,000 |
| 10 Jan | 900 | 450 | 405,000 |
| 22 Jan | 400 | 405 | 162,000 |
| Total | 2,000 | 917,000 | |
| Unit price | 459 | ||
| Month end Unit | 1,250 | ||
| Inventory Value | 573,125 |
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