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Inventory valuation: FIFO closing stock

FIFO issues the oldest units first, so closing stock consists of the most recent purchases.

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Worked examples

Example 1 · level 1

Gupta & Sons — Opening stock: 600 units @ ₹34; Purchase 1: 300 units @ ₹40. Total issues during the period: 700 units. Value the closing stock using FIFO.

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Units available = 900; closing = 900 − 700 = 200.
Value from the latest lots: 200 × ₹40.
Closing stock = ₹8,000.

Answer: ₹8,000

Example 2 · level 2

Iyer Textiles — Opening stock: 200 units @ ₹55; Purchase 1: 100 units @ ₹60; Purchase 2: 100 units @ ₹65. Total issues during the period: 200 units. Value the closing stock using FIFO.

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Units available = 400; closing = 400 − 200 = 200.
Value from the latest lots: 100 × ₹65 + 100 × ₹60.
Closing stock = ₹12,500.

Answer: ₹12,500

Example 3 · level 3

Nair Spices — Opening stock: 300 units @ ₹58; Purchase 1: 350 units @ ₹59; Purchase 2: 600 units @ ₹63; Purchase 3: 450 units @ ₹68. Total issues during the period: 850 units. Value the closing stock using FIFO.

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Units available = 1700; closing = 1700 − 850 = 850.
Value from the latest lots: 450 × ₹68 + 400 × ₹63.
Closing stock = ₹55,800.

Answer: ₹55,800