Reference no: EM132911598

Bean is a business that supplies cleaning products. It values the inventory using the first in first out (FIFO) method. The company has the following transactions with its product P during the year ended 31 May 2020

2020

1 June             Opening inventory 190 units at $23 each 

15 August          Buys 180 units at $26 each

27 November       Sells 160 units at $38 each

2020

21 February         Sells 150 units at $43 each
2 March               Buys 160 units at $29 each
30 April               Sells 117 units at $48 each
15 May                 Buys 88 units at $25 each

Bean is considering switching from the FIFO method of inventory valuation to average cost method (AVCO).

Problem (a) A table showing how inventory is valued using first in first out (FIFO) method after each issue and receipt.

Problem (b) Determine the value of inventory after every issue and receipt if average cost method (AVCO) is used to value inventory.

Problem (c) With reference to accounting concepts. discuss the methods of valuing inventory.