A trader buys and sells garden fertiliser in 50 kilo units. Inventory at 1 July was 250 units valued at $16 per unit. Purchases and sales during the month were as follows.

date purchases (units) sales (units)
3 July sales 100
11 July purchases ($13 per unit) 200
14 July sales 200
25 July purchases ($14 per unit) 200
29 July sales 200

The FIFO method is used to value inventory.

What is the value of the closing inventory at 31 July?

Q: What topic does this question test?

This question tests Inventory Valuation in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Q: Which exam paper is this question from?

This question appeared in the Cambridge A-Level Accounting Oct/Nov 2011 examination, Paper 1 Variant 2 (9706_w11_qp_12.pdf).

Question

A trader buys and sells garden fertiliser in 50 kilo units. Inventory at 1 July was 250 units valued at $16 per unit. Purchases and sales during the month were as follows.

date purchases (units) sales (units)
3 July sales 100
11 July purchases ($13 per unit) 200
14 July sales 200
25 July purchases ($14 per unit) 200
29 July sales 200

The FIFO method is used to value inventory.

What is the value of the closing inventory at 31 July?

Oracle Prep · Accepted Answer

The correct answer is B: $2100.

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