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JAMB Principles of Accounts 2009 Question 20

Question 20

Stock Valuation

Jan. 1 Received 1,000 units at ₦10 each
Jan. 2 Received 2,000 units at ₦12 each
Jan. 3 Issued 1,500 units
Jan. 4 Received 1,000 units at ₦11 each
Jan. 5 Issued 1000 units
Using FIFO method, what is the value of the closing stock?

  1. A.₦34,000
  2. B.₦29,000
  3. C.₦17,000
  4. D.₦12,000
Show the answer and explanation

Answer: C (₦17,000)

Explanation

4 000 units received, 2 500 issued, 1 500 left. FIFO issues the oldest first, so what is left is 500 @ ₦12 + 1 000 @ ₦11 = 6 000 + 11 000 = ₦17 000.