More Related Content Similar to Methods of Valuing Material Issues.pptx (15) Methods of Valuing Material Issues.pptx2. Problem No. 1: Prepare the Store Ledger Account from the following
information pricing the issued material on FIFO Method
Issue of Material
5th January 140 tons
8th January 60 tons
16th January 120 tons
18th January 210 tons
22nd January 200 tons
25th January 150 tons
29th January 240 tons
Receipt of Material
1st January 2020, 300 tons @ Rs. 8 per ton
7th January 2020, 200 tons @ Rs. 8.20 per ton
15th January 2020, 250 tons @ Rs. 7.90 per ton
23rd January 2020, 400 tons @ Rs. 7.50 per ton
28th January 2020, 200 tons @ Rs. 7.70 per ton
3. STORES LEDGER ACCOUNT
FIFO METHOD
Date Particulars
Receipts Issues Balance
Quantity Rate Amount Quantity Rate Amount Quantity Rate
Amo
unt
2020
Jan. 1 Goods Received Note No. 300 8 2400 - - - 300 8 2400
Jan. 5 Material Requisition Slip No. - - - 140 8 1120 160 8 1280
Jan. 7 Goods Received Note No. 200 8.2 1640 - - - 160 8 1280
200 8.2 1640
Jan. 8 Material Requisition Slip No. - - - 60 8 480 100 8 800
200 8.2 1640
Jan. 15Goods Received Note No. 250 7.9 1975 - - - 100 8 800
200 8.2 1640
250 7.9 1975
Jan. 16Material Requisition Slip No. 120
100 8 800 180 8.2 1476
20 8.2 164 250 7.9 1975
4. STORES LEDGER ACCOUNT
FIFO METHOD
Date Particulars
Receipts Issues Balance
Quantity Rate Amount Quantity Rate Amount Quantity Rate
Amou
nt
Jan. 18
Material Requisition Slip
No.
210
180 8.2 1476
30 7.9 237 220 7.9 1738
Jan. 22
Material Requisition Slip
No.
200 7.9 1580 20 7.9 158
Jan. 23 Goods Received Note No. 400 7.5 3000 20 7.9 158
400 7.5 3000
Jan. 25 Material Requistion Slip No. 150
20 7.9 158
130 7.5 975 270 7.5 2025
Jan. 28 Goods Received Note No. 200 7.7 1540 270 7.5 2025
200 7.7 1540
Jan. 29
Material Requisition Slip
No.
240 7.5 1800 30 7.5 225
200 7.7 1540
5. PROBLEM No. 2: The stock in hand of a material as on 1st September 2020
was 500 units at Re. 1 per unit. The following purchases and issues were
subsequently made. Prepare the Stores Ledger Account showing how the
value of the issues would be recorded under (a) FIFO and (b) LIFO Methods.
Issued
September 9 500 units
September 22 500 units
September 30 500 units
October 15 500 units
October 22 500 units
November 11 500 units
Purchased
September 6 100 units at Rs. 1.10
September 20 700 units at Rs. 1.20
September 27 400 units at Rs. 1.30
October 13 1,000 units at Rs. 1.40
October 20 500 units at Rs. 1.50
November 17 400 units at Rs. 1.60
6. STORES LEDGER ACCOUNT
FIFO METHOD
Date Particulars
Receipts Issues Balance
Quantity Rate Amount Quantity Rate Amount Quantity Rate Amount
Sep. 1 Balance b/d 500 1.00 500.00
Sep. 6
Goods Received Note
No.
100 1.10 110.00 500 1.00 500.00
100 1.10 110.00
Seo.9
Material Requisition Slip
No.
500 1.00 500.00 100 1.10 110.00
Sep.20
Goods Received Note
No.
700 1.20 840.00 100 1.10 110.00
700 1.20 840.00
Sep.22
Material Requisition Slip
No.
500
100 1.10 110
400 1.20 480 300 1.20 360.00
7. STORES LEDGER ACCOUNT
FIFO METHOD
Date Particulars
Receipts Issues Balance
Quantity Rate Amount Quantity Rate Amount Quantity Rate Amount
Sep.27 Goods Received Note No. 400 1.30 520.00 300 1.20 360.00
400 1.30 520.00
Sep.30 Material Requistion Slip No. 500
300 1.20 360.00
200 1.30 260.00 200 1.30 260.00
Oct. 13 Goods Received Note No. 1000 1.40 1400.00 200 1.20 260.00
1000 1.40 1400.00
Oct.15 Material Requistion Slip No. 500
200 1.20 260.00
300 1.40 420.00 700 1.40 980.00
Oct. 20 Goods Received Note No. 500 1.50 750.00 700 1.40 980.00
500 1.50 750.00
Oct. 22 Material Requistion Slip No. 500 1.40 700.00 200 1.40 280.00
500 1.50 750.00
Nov. 11 Material Requistion Slip No. 500
200 1.40 280.00
300 1.50 450.00 200 1.50 300.00
Nov. 17 Goods Received Note No. 400 1.60 640.00 200 1.50 300.00
400 1.60 640.00
8. STORES LEDGER ACCOUNT
LIFO METHOD
Date Particulars
Receipts Issues Balance
Quantity Rate Amount Quantity Rate Amount Quantity Rate Amount
Sep. 1 Balance b/d 500 1.00 500.00
Sep. 6 Goods Received Note No. 100 1.10 110.00 500 1.00 500.00
100 1.10 110.00
Sep. 9 Material Requisition Slip No. 500
100 1.1 110
400 1 400 100 1 100.00
Sep.20 Goods Received Note No. 700 1.20 840.00 100 1 100.00
700 1.20 840.00
Sep.22 Material Requistion Slip No. 500 1.2 600 100 1 100.00
200 1.2 240.00
Sep.27 Goods Received Note No. 400 1.30 520.00 100 1 100.00
200 1.2 240.00
400 1.30 520.00
9. STORES LEDGER ACCOUNT
LIFO METHOD
Date Particulars
Receipts Issues Balance
Quantity Rate Amount Quantity Rate Amount Quantity Rate Amount
Sep.30
Material Requistion Slip
No.
500
400 1.3 520 100 1 100.00
100 1.2 120 100 1.2 120.00
Oct. 13
Goods Received Note
No.
1000 1.40 1400.00 100 1 100.00
100 1.2 120.00
1000 1.40 1400.00
Oct.15
Material Requisition
Slip No.
500 1.4 700 100 1 100.00
100 1.2 120.00
500 1.4 700.00
Oct. 20
Goods Received Note
No.
500 1.50 750.00 100 1 100.00
100 1.2 120.00
500 1.4 700.00
500 1.50 750.00
10. STORES LEDGER ACCOUNT
LIFO METHOD
Date Particulars
Receipts Issues Balance
Quantity Rate Amount Quantity Rate Amount Quantity Rate Amount
Oct. 22
Material Requistion Slip
No.
500 1.5 750 100 1 100.00
100 1.2 120.00
500 1.4 700.00
Nov. 11
Material Requistion Slip
No.
500 1.4 700 100 1 100.00
100 1.2 120.00
Nov. 17
Goods Received Note
No.
400 1.60 640.00 100 1 100.00
100 1.2 120.00
400 1.60 640.00
11. PROBLEM No. 3: The following transactions occur in the purchase and issue
of a material:
From the above, prepare the stores ledger account.
(a) by adopting FIFO method of charging material issued and
(b) by adopting the LIFO method.
What would be the value of stock in hand at the end of period according to each of these two methods?
Jan. 2 Purchased 4,000 units @ Rs. 4.00 per unit
Jan. 20 Purchased 500 units @ Rs. 5.00 unit
Feb. 5 Issued 2,000 units
Feb. 10 Purchased 6,000 units @ Rs. 6.00 per unit
Feb. 12 Issued 4,000 units
Mar. 2 Issued 1,000 units
Mar. 5 Issued 2,000 units
Mar. 15 Purchased 4,500 units @ Rs. 5.50 per unit
Mar. 20 Issued 3,000 units
12. STORES LEDGER ACCOUNT
FIFO METHOD
Date Particulars
Receipts Issues Balance
Quantity Rate Amount Quantity Rate Amount Quantity Rate Amount
Jan. 2 Goods Received Note No. 4000 4 16000 4000 4 16000
Jan. 20 Goods Received Note No. 500 5 2500 4000 4 16000
500 5 2500
Feb. 5 Material Requisition Slip No. 2000 4 8000 2000 4 8000
500 5 2500
Feb. 10 Goods Received Note No. 6000 6 36000 2000 4 8000
500 5 2500
6000 6 36000
Feb. 12 Material Requistion Slip No. 4000
2000 4 8000
500 5 2500
1500 6 9000 4500 6 27000
Mar. 2 Material Requistion Slip No. 1000 6 6000 3500 6 21000
Mar. 5 Material Requistion Slip No. 2000 6 12000 1500 6 9000
Mar. 15 Goods Received Note No. 4500 5.5 24750 1500 6 9000
4500 5.5 24750
Mar. 20 Material Requistion Slip No. 3000
1500 6 9000
1500 5.5 8250 3000 5.5 16500
13. STORES LEDGER ACCOUNT
LIFO METHOD
Date Particulars
Receipts Issues Balance
Quantity Rate Amount Quantity Rate Amount Quantity Rate Amount
Jan. 2 Goods Received Note No. 4000 4 16000 4000 4 16000
Jan. 20 Goods Received Note No. 500 5 2500 4000 4 16000
500 5 2500
Feb. 5 Material Requistion Slip No. 2000
500 5 2500
1500 4 6000 2500 4 10000
Feb. 10 Goods Received Note No. 6000 6 36000 2500 4 10000
6000 6 36000
Feb. 12 Material Requistion Slip No. 4000 2500 4 10000
4000 6 24000 2000 6 12000
Mar. 2 Material Requistion Slip No. 1000 6 6000 2500 4 10000
1000 6 6000
Mar. 5 Material Requistion Slip No. 2000
1000 6 6000
1000 4 4000 1500 4 6000
Mar. 15 Goods Received Note No. 4500 5.5 24750 1500 4 6000
4500 5.5 24750
Mar. 20 Material Requistion Slip No. 3000 5.5 16500 1500 4 6000
1500 5.5 8250
14. Show the Stores Ledger entries as they would appear
when using: (a) the weighted average method and (b)
the simple average method
Month Date Particulars Units Price (Rs.)
April 1 Balance in hand b/f 300 2.00
2 Purchased 200 2.20
4 Issued 150
6 Purchased 200 2.30
11 Issued 150
19 Issued 200
22 Purchased 200 2.40
27 Issued 150
15. STORES LEDGER ACCOUNT
SIMPLE AVERAGE METHOD
Date Particulars
Receipts Issues Balance
Quantity Rate Amount Quantity Rate Amount Quantity Rate Amount
Apr. 1 Balance B/D 300 2 600
Apr. 2 Goods Received Note No. 200 2.2 440 300 2 600
200 2.2 440
Apr. 4 Material Requisition Slip No. 150
150 2+2.2 / 2
2.1 315 350 - 725
Apr. 6 Goods Received Note No. 200 2.3 460 350 - 725
200 2.3 460
Apr. 11 Material Requisition Slip No. 150
2+2.20+2.30 /
3
2.17 325 400 - 860
Apr. 19 Material Requisition Slip No. 200 2.20+2.30 /2
2.25 450 200 410
Apr. 22 Goods Received Note No. 200 2.4 480 200 - 410
200 2.4 480
Apr. 27 Material Requisition Slip No. 150 2.30+2.40 /2
2.35 353 250 - 537
16. STORES LEDGER ACCOUNT
WEIGHTED AVERAGE METHOD
Date Particulars
Receipts Issues Balance
Quantity Rate Amount Quantity Rate Amount Quantity Rate Amount
Apr. 1 Balance B/D 300 2 600
Apr. 2 Goods Received Note No. 200 2.2 440 300 2 600
200 2.2 440
Apr. 4 Material Requistion Slip No. 150 600+440/300+200
2.08 312 350 - 728
Apr. 6 Goods Received Note No. 200 2.3 460 350 - 728
200 2.3 460
Apr. 11 Material Requistion Slip No. 150 728+460 / 350+200
2.16 324 400 864
Apr. 19 Material Requistion Slip No. 200 864/400
2.16 432 200 432
Apr. 22 Goods Received Note No. 200 2.4 480 200 432
200 2.4 480
Apr. 27 Material Requistion Slip No.
150
432+480 / 200
+200
2.28 342 250 - 570