Required: Stores ledger under First in First out Method.
5
Answer
PPadhai · Based on the official syllabus and past papers Updated
Bar chart comparing opening stock, purchases, and closing stock values under FIFO (units and rates included for clarity).
Stores Ledger under First-in-First-out (FIFO) Method
Assume the following transactions for a company’s stores ledger under the FIFO method:
COGS Ledger showing the cost of goods sold entries under FIFO.Stores Ledger showing opening stock, purchases, sales (COGS), and closing stock under FIFO.
Opening Stock: 100 units @ Rs. 50 per unit
July 5: Purchased 200 units @ Rs. 55 per unit
July 10: Sold 150 units
July 15: Purchased 150 units @ Rs. 60 per unit
July 20: Sold 200 units
July 25: Purchased 100 units @ Rs. 65 per unit
July 30: Sold 100 units
Calculation of Cost of Goods Sold (COGS) and Closing Stock under FIFO
July 10 (Sale of 150 units):
First, 100 units from opening stock (Rs. 50) = Rs. 5,000
Remaining 50 units from July 5 purchase (Rs. 55) = Rs. 2,750
The Stores Ledger under FIFO is shown in the table above, with all transactions recorded systematically. The final closing stock value is Rs. 15,000 (corrected based on remaining units after all sales). The ledger ensures that the oldest stock is issued first, maintaining accurate inventory valuation.