An engineering company charges goods to production on the basis of the AVCO (Average Cost) perpetual inventory method. Details of the receipts and issues of splash cans for 19_3 were:

On 1 January 19_3 the stock of splash cans on hand comprised 7 cans with a total value of £96.60.

(a) Draft a statement as below to record receipts and issues:

(b) Af at the end of the financial year, the company adopts the periodic method of valuing stocks what would have been the value of closing stock at 31 December 1983 using:
(i) AVCO (Average Cost).
(ii) FIFO (First in, First Out).
(iii) LIFO (Last in, First out)?

(c) Explain the reasons for the differences in stock valuations produced by each of the methods in

(b) above.

Transcribed Image Text:

SPLASH CANS Receipts 10 January 4 April 2 June 20 @ 14.00 10 @ 14.00 22 September 9 November 12 @ 14.30 20 @ 15.10 14 @ 15.20 Issues 28 February 8 May 20 July 11 October 3 December 15 6 14 18 20