JAMB Principles of Accounts 2008 Question 21

Question 21

Stock Valuation

Aug. 1 Received 20 units at N60 each
Aug. 6 Received 20 units at N68 each
Aug. 10 Issued 16 units
Aug. 20 Received 40 units at N80 each
Aug. 31 Issued 48 units
Using the FIFO method, what is the value of the closing stock?

A.N1280
B.N1184
C.N1024
D.N960

Show the answer and explanation

Answer: A (N1280)

Explanation

80 units received, 64 issued, 16 left. Under FIFO the oldest goes out first, so the 16 left are from the ₦80 batch: 16 × 80 = ₦1 280.