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Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :
Sales Rs.9,45,000
General administration cost Rs.25,000
Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000
Purchases (including freight inward):
June 1 2,00,000 litres @ Rs.2.85 per litre
June 30 1,00,000 litres @ Rs.3.03 per litre
June 30 Closing stock 1,30,000 litres
Q.Compute the value of inventory on June 30 using LIFO method of inventory costing.
- a)Rs 3,93,000
- b)Rs 3,69,000
- c)Rs 2,97,000
- d)Rs 4,18,000
- e)
Correct answer is option 'A'. Can you explain this answer?
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Calculation of Inventory Value using LIFO method
Sales: Rs.9,45,000
General administration cost: Rs.25,000
Opening Stock: 1,00,000 litres @ Rs.3 per litre = Rs.3,00,000
Purchases (including freight inward):
June 1: 2,00,000 litres @ Rs.2.85 per litre
June 30: 1,00,000 litres @ Rs.3.03 per litre
June 30 Closing stock: 1,30,000 litres
Step 1: Calculate the Cost of Goods Sold (COGS) using LIFO method
- Last in First Out (LIFO) method assumes that the last items purchased are the first ones sold.
- Therefore, the COGS for the month of June will be calculated based on the cost of the last purchase, followed by the second last purchase, and so on.
COGS = (1,00,000 litres @ Rs.3.03 per litre) + (30,000 litres @ Rs.2.85 per litre)
COGS = Rs.3,09,900
Step 2: Calculate the value of inventory on June 30 using LIFO method
- The closing stock of 1,30,000 litres will be valued based on the cost of the second last purchase, followed by the last purchase, and so on.
Value of closing stock = (30,000 litres @ Rs.2.85 per litre) + (1,00,000 litres @ Rs.3.03 per litre)
Value of closing stock = Rs.3,59,500
Therefore, the value of inventory on June 30 using LIFO method is Rs.4,84,500 (Rs.3,00,000 + Rs.2,84,500 - Rs.3,00,000). Option (a) is the correct answer.
Sales: Rs.9,45,000
General administration cost: Rs.25,000
Opening Stock: 1,00,000 litres @ Rs.3 per litre = Rs.3,00,000
Purchases (including freight inward):
June 1: 2,00,000 litres @ Rs.2.85 per litre
June 30: 1,00,000 litres @ Rs.3.03 per litre
June 30 Closing stock: 1,30,000 litres
Step 1: Calculate the Cost of Goods Sold (COGS) using LIFO method
- Last in First Out (LIFO) method assumes that the last items purchased are the first ones sold.
- Therefore, the COGS for the month of June will be calculated based on the cost of the last purchase, followed by the second last purchase, and so on.
COGS = (1,00,000 litres @ Rs.3.03 per litre) + (30,000 litres @ Rs.2.85 per litre)
COGS = Rs.3,09,900
Step 2: Calculate the value of inventory on June 30 using LIFO method
- The closing stock of 1,30,000 litres will be valued based on the cost of the second last purchase, followed by the last purchase, and so on.
Value of closing stock = (30,000 litres @ Rs.2.85 per litre) + (1,00,000 litres @ Rs.3.03 per litre)
Value of closing stock = Rs.3,59,500
Therefore, the value of inventory on June 30 using LIFO method is Rs.4,84,500 (Rs.3,00,000 + Rs.2,84,500 - Rs.3,00,000). Option (a) is the correct answer.
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Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the value of inventory on June 30 using LIFO method of inventory costing.a)Rs 3,93,000b)Rs 3,69,000c)Rs 2,97,000d)Rs 4,18,000e)Correct answer is option 'A'. Can you explain this answer?
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Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the value of inventory on June 30 using LIFO method of inventory costing.a)Rs 3,93,000b)Rs 3,69,000c)Rs 2,97,000d)Rs 4,18,000e)Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the value of inventory on June 30 using LIFO method of inventory costing.a)Rs 3,93,000b)Rs 3,69,000c)Rs 2,97,000d)Rs 4,18,000e)Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the value of inventory on June 30 using LIFO method of inventory costing.a)Rs 3,93,000b)Rs 3,69,000c)Rs 2,97,000d)Rs 4,18,000e)Correct answer is option 'A'. Can you explain this answer?.
Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the value of inventory on June 30 using LIFO method of inventory costing.a)Rs 3,93,000b)Rs 3,69,000c)Rs 2,97,000d)Rs 4,18,000e)Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the value of inventory on June 30 using LIFO method of inventory costing.a)Rs 3,93,000b)Rs 3,69,000c)Rs 2,97,000d)Rs 4,18,000e)Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the value of inventory on June 30 using LIFO method of inventory costing.a)Rs 3,93,000b)Rs 3,69,000c)Rs 2,97,000d)Rs 4,18,000e)Correct answer is option 'A'. Can you explain this answer?.
Solutions for Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the value of inventory on June 30 using LIFO method of inventory costing.a)Rs 3,93,000b)Rs 3,69,000c)Rs 2,97,000d)Rs 4,18,000e)Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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Here you can find the meaning of Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the value of inventory on June 30 using LIFO method of inventory costing.a)Rs 3,93,000b)Rs 3,69,000c)Rs 2,97,000d)Rs 4,18,000e)Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the value of inventory on June 30 using LIFO method of inventory costing.a)Rs 3,93,000b)Rs 3,69,000c)Rs 2,97,000d)Rs 4,18,000e)Correct answer is option 'A'. Can you explain this answer?, a detailed solution for Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the value of inventory on June 30 using LIFO method of inventory costing.a)Rs 3,93,000b)Rs 3,69,000c)Rs 2,97,000d)Rs 4,18,000e)Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the value of inventory on June 30 using LIFO method of inventory costing.a)Rs 3,93,000b)Rs 3,69,000c)Rs 2,97,000d)Rs 4,18,000e)Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the value of inventory on June 30 using LIFO method of inventory costing.a)Rs 3,93,000b)Rs 3,69,000c)Rs 2,97,000d)Rs 4,18,000e)Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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