March 26th 2020

# 2 Replies

Try to use these study notes:

For ACCA FIA MA1, MA2, or FMA / MA / F2: https://opentuition.com/fia/ma2/

If you need further help just say so in a comment bellow and say what exactly you do not understand, and I shall try to help.

March 30th 2020

In FIFO (First in first out) you take the first receipt for the period first, (or sometimes it is the open inventory) and subtract the value of the issue (into production etc.). For example: Say you have opening inventory of 100 units with a value of £500. On the 3/2/2020, 200 unit worth £700 are brought into the warehouse. And on 5/2/2020, 150 unit are issued to production. The value of the issue on 5/2/2020 is £ 675

Date: | Units | Value: £ | Explanation:

1/2/2020 Opening inventory | 100 | 500 | £500 ÷ 100 units = £5 per unit

3/2/2020 Receipts | 200 | 700 | 200 units are brought into the warehouse with a value of £3.5 per unit. ( £700 ÷ 200 = £3.5)

5/2/2020 Issue | 150 | 675 | (100 x 5) + (50 x 3.5) 100 units from opening inventor valued at £500 + 50 units from the receipts ( 50 x £3.5) valued at 175 = 150 units valued at 675.

Closing inventory | 150 |. 520 | (150 x 3.5) There are 150 units from the receipt on 3/2/2020 left after subtracting the units issued into production on 5/2/2020. To find the value of closing inventory we take the the units and multiply them by the unit value (£3.5). You use the same system for finding the closing value as finding the value of an issue. Start with the first receipt (that still has some units left) and calculate the value of that. Then move on to the next receipt and so on.

I hope this is understandable -It is very difficult to make tables on this forum.
I shall try to post on the others (LIFO etc.) when I have more time.

April 3rd 2020