4 (a) Afnan Traders makes the following purchases and issues during the month of

November 2019

FIFO METHOD

Date 2019	Transactions	Quantity UNITS	Per Unit OMR
1	Inventory Beginning	100	10
5	Purchases	200	11
9	Purchases	300	12
16	Sales	550	-
26 \	Purchases	400	13
31	Sales	250	-

REQUIRED:

Determine the (a) Cost of Ending Merchandise Inventory, (b) The Cost of Goods Sold

under Perpetual Inventory System by FIFO Method (6 Marks)

Answer 4(a): Afnan Traders

FIFO (Perpetual)

Date 2019 Nov.	PURCHASES			SALES			BALANCE
	Quantity	Rate (OMR)	Amount (OMR)	Quantity	Rate (OMR)	Amount (OMR)	Quantity	Rate (OMR)	Amount (OMR)

(a) Cost of Ending Merchandise Inventory =

(b) The Cost of Goods Sold =

4 (b) While making valuation of inventory of a manufacturing company, how would you choose

between methods of inventory valuation (FIFO or LIFO) for ending inventory and cost of

goods sold? Is it possible for you to change the method whenever you want, discuss.