Comparisons of Methods using Perpetual Stock System Trading Account for the year ended 31 December 2018 FIFO LIFO AVCO FIFO LIFO AVCO RM RM RM Opening Stock 1,500 Add Purchases 1,500 1,500 Sales 49,100 49,100 49,100 RM RM RM 91,600 91,600 91,600 Less Closing Stock (18,450) (17,700) (18.241) COGS 32,150 32,900 32,359 Gross Profit 59,450 58,700 59,241 91,600 91,600 91,600 91.600 91,600 91,600 A higher closing stock value results in a higher profit figure. Even though the FIFO method produces a higher profit, it is to be preferred since it gives a 'fairer' valuation of closing stock than LIFO. The FIFO closing stock valuation gives the latest price of the closing stock for inclusion in Balance Sheet. EXERCISE: 1. Fateh had 100 litres of foam liquid in stock as at 1 November 2018, purchased at RM2 per litre. During the month to 31 November 2018, the following changes occurred in the stock position. Date Purchases/Receipts Cost per litre Quantity (Litres) November 2 200 (RM) 2.50 5 7 88 Sales/Issues Quantity (Litres) 80 70 10 350 3.00 12 290 15 50 17 250 3.20 21 150 26 100 580 29 300 3.50 Fateh is using the Perpetual System in recording the stock