Practice Questions: IAS 2 (Inventories)

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Example # 1
Yummie, candy and chocolate distributor, made the following purchases of new product, Amazing Chocobar during 20X1:
  • 10 January 20X1: 1 000 units at CU 28.00 each;
  • 14 February 20X1: 1 500 units at CU 28.20 each;
  • 17 March 20X1: 3 000 units at CU 28.40 each; and
  • 18 June 20X1: 2 500 units at CU 28.55 each.
As Chocobar is a new product and massive advertising campaign is planned after 1 July 20X1, Yummie sold only one batch of 4 200 units of Amazing Chocobar to its biggest customer, for total sales price of CU 159 600. This happened on 2 May 20X1.
Required: Calculate the stock value of Amazing Chocobar in Yummie’s warehouse at 30 June 20X1 (ignore other components of acquisition cost).
1- FIFO Method,                    2- Weighted Average Method

Example # 2
XYZ Company imports good from China and sells them in the local market. It is confused between using FIFO method and Weighted Average method to value its goods. Following are the purchases and sales made by the company during the current year.
Purchases:    January: 20,000 units @ $25 each
March: 25,000 units @ $ 30 each
July: 30,000 units @ $35 each
Sales:   May: 25,000 units      November: 30,000 units
Required: Based on the FIFO method and Weighted Average method, calculate the value of inventory at the end of May and November and December.

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