47 47 Module 7 Discussion The following is an excerpt from a

47 47 Module 7 Discussion The following is an excerpt from a conversation between Paula Marlo, the warehouse manager for Musick Foods Wholesale Co., and its accountant, Mike Hayes. Musick Foods operates a large regional warehouse that supplies produce and other grocery products to grocery stores in smaller communities Paula: Mike, can you explain what\'s going on here with these monthly statements? Mike: Sure, Paula. How can I help you? Paula: I don\'t understand this last-in, first-out inventory procedure. It just doesn\'t make sense. Mike: Well, what it means is that we assume that the last goods we receive are the first ones sold. So the inventory consists of the items we purchased first Paula: Yes, but that\'s my problem. It doesn\'t work that way! We always distribute the oldest produce first. Some of that produce is perishable! We can\'t keep any of it very long or itll spoil Mike: Paula, you don\'t understand. We only assume that the products we distribute are the last ones received. We don\'t actually have to distribute the goods in this way Paula: I always thought that accounting was supposed to show what really happened. It all sounds like \"make believe\" to me! Why not report what really happens? Respond to Paula\'s concerns. Post to the module discussion board and then reply to at least two of your classmates posts.

Solution

Mike : in this FIFO Inventori accounting we take goods that has first arrived,in the sense that goods sold which are received first

paula : what it mean how to know which is first

mike : it is the inventory which is received first for better understanding i will say you an example

goods received on January- 2- 2018 = 2000 @ 5 rupees

And on January- 17- 2018 = 5000 @ 8 rupees

in case of FIFO inventory is taken first 2000 @ 5 rupees is taken hope you understand

Paul\'s : yes thank you