Exercise 812 Part Level Submission Units Unit Cost a PHAROAH

Exercise 8-12 (Part Level Submission)

Units

Unit Cost

(a)

PHAROAH COMPANY
COMPUTATION OF INVENTORY FOR PRODUCT
BAP UNDER FIFO INVENTORY METHOD
March 31, 2017

Units

Unit Cost

Total Cost

Exercise 8-12 (Part Level Submission) Pharoah Company was formed on December 1, 2016. The following information is available from Pharoah’s inventory records for Product BAP. Units Unit Cost January 1, 2017 (beginning inventory) 678 $ 6.00 Purchases:    January 5, 2017 1,356 7.00    January 25, 2017 1,469 8.00    February 16, 2017 904 9.00    March 26, 2017 678 10.00 A physical inventory on March 31, 2017, shows 1,808 units on hand.

Solution

Calculation of value of closing stock under FIFO

Particulars

Unit (A)

Rate (B)

Total (C=A*B)

Closing inventory units

1808

Closing stock rate under FIFO

26-Mar-17

              678

$10

$6,780

16-Feb-17

           1,130

$9

$10,170

Closing stock units

           1,808

Total value of closing stock under FIFO

$16,950

Total value of closing stock under FIFO

$16,950