ACCA FA2 INVENTORY VALUE 2

At 1 January 20X3 Wasan had 500 units of a particular item in inventory. These were valued at $900 per unit. During January, the purchase and sales of the item were:

Date Units Price per unit Sales (units)
5 Jan 250
10 Jan 500 810
17 Jan 200
22 Jan 600 729
28 Jan 300

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)?

ACCA FA2 inventory value

Suggested Solution.

No of units available for sales

= 500 + 500 +600

=1600

No of units sold during the month

=250 +200 +300

=750

No of units at the end of the month

= 1600 -750

=850 Units

Periodic weighted average rate computation

Date Units Price per unit Value
1 Jan 500 900 450,000
10 Jan 500 810 405,000
22 Jan 600 729 437,400
Total 1,600 1,292,400
Unit price 808
Month end Unit 850
Inventory Value 686,588

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