JAMB Principles of Accounts 2004 Question 14

Question 14

Stock Valuation

Use the information below to answer questions 14 and 15.
Date | Receipt (Units) | Issued (Units)
May 2 | 80 @ ₦3.00 | —
May 10 | 50 @ ₦3.20 | —
May 17 | — | 20
May 25 | — | 60
May 31 | 20 @ ₦2.90 | —
What is the value of raw materials issued on May 17th based on the LIFO method?

A.₦60
B.₦61
C.₦62
D.₦64

Show the answer and explanation

Answer: D (₦64)

Explanation

Under LIFO the 20 units come from the latest receipt before 17 May (May 10 at ₦3.20): 20 × 3.20 = ₦64.