Question

A business follows the FIFO method of inventory management and undertook the following inventory transactions during the year :  Opening Stock: 100 0 units @ ₹10 0   Purchases: 200 0 units @ ₹12 0   Sales: 250 0 units  W hat is the closing inventory value of the business ? 

Q: Answer-A business follows the FIFO method of inventory management and undertook the following inventory tr...

Explanation FIFO First In First Out i.e. o ldest stock is sold first As such, for selling the 250 0 units , 100 0 units from opening stock at 10 0 each are used followed by additional 150 0 units from the purchases of 2000 units made during the year at 12 0 each. Thus, the remaining inventory from the purchases stands at 2000 units purchased 1500 units sold 500 units of 12 0 each. Closing inventory 50 0 units 12 0 60 , 0 0 0