UNIT-II
1) From the particulars given below write up the stores ledger card :
2018
January 1 opening stock 1,000 units at Rs. 26 each
5 purchased 500 units at Rs. 24.50 each
7 Issued 750 units
10 purchased 1,500 units at Rs. 24 each
12 Issued 1,100 units.
15 purchased 1,000 units at Rs. 25 each.
17 Issued 500 units.
18 Issued 300 units.
25 purchased 1,500 units at Rs. 26 each.
29 Issued 1,500 units.
Adopt the FIFO method of issue and ascertain the value of the closing stock.
2) Draw a stores ledger card recording the following transaction under
A) FIFO method and B) LIFO method.
2018 July 1 Opening stock 2,000 units at Rs. 10 each.
5 Received 1,000 units at Rs. 11 each
6 Issued 500 units.
10 Received 5000 units at Rs.12 each.
12 Received back 50 units out of the issue made on 6th July.
14 Issued 600 units.
18 Returned to supplier 100 units out of goods received on 5th.
19 Received back 100 units out of the issue made on 14th July.
20 Issued 150 units.
25 Received 500 units at Rs.14 each.
28 Issued 300 units.
The stock verification report reveals that there was a shortage of 10 units on 18th July and
another shortage of 15 units on 26th July.
3)Prepare a stores ledger on FIFO and HIFO method :
2021-MAR1 Receipts 600 units at Rs.5 per unit
16 Receipts 400 units at Rs. 6 per unit
20 Issues 500 units
22 Receipts 400 units at Rs. 7 per unit
23 Issues 600 units
25 Receipts 200 units at Rs.8 per units
31 Issues 200 units
4) From the following particulars prepare stores ledger account under “FIFO” method of
pricing issues.
2022
1
January 1 Opening balance 50 units at Rs. 30 per unit.
5 Issued 20 units.
7 Purchased 48 units at Rs. 40 per unit.
9 Issued 20 units.
19 Purchased 36 units at Rs. 35 per unit.
24 Received back 10 units out of the units issued
on 9th January.
27 Issued 15 units
5) X Ltd., has purchased and issued the materials in the following order.
Jan 2015
1 Purchased 300 units at Rs. 5 per unit.
4 Purchased 600 units at Rs. 4 per unit.
6 Issued 500 units.
10 Purchased 700 units at Rs. 5 per unit.
Ascertain the quantity of closing stock as on 31-1-2015 under LIFO and HIFO method.
6) X company has purchased and issued materials as under :
2019
June 1 Stock of material 200 units at Rs. 2.50 per unit.
3 Purchased 300 units at Rs. 3 per unit.
7 Purchased 500 units at Rs. 4 per unit.
10 Issued 600 units.
12 Purchased 400 units at Rs. 4 per units.
18 Issued 500 units.
24 Purchased 400 units at Rs. 5 per unit.
28 Issued 200 unit.
Prepare the stores ledger under FIFO method and LIFO method.
7) The following receipts and issues were made for a material during the month of may 2020.
RECEIPT
1-5-20 Balance of stock 500 units @ Rs. 4.50 per unit.
7-5-20 Purchases 400 units @ Rs. 5.00 per unit.
15-5-20 Purchase 1,000 units @ Rs. 5.5 per unit.
25-5-20 Purchase 700 units @ Rs.4.8 per unit.
ISSUES
3-5-20 Issue 200 units.
8-5-20 Issue 100 units.
17-5-20 Issue 700 units.
26-5-20 Issue 700 units.
Assume that base stock is 200 units out opening stock, use FIFO method.
8) From the following particulars, prepare stores ledger by adopting simple average method of
pricing of material issues.
Date Receipts Issues
2019 Aug 1 300 units at 10 per unit
10 200 units at 12 per unit
2
12 400 units at 11 per unit
15 250 units
16 150 units
18 200 units at 14 per unit
20 300 units
22 300 units at 15 per unit
25 100 units at 16 per unit
27 200 units
31 100 units
9) From the following particulars prepare stores ledger account showing the pricing
of material issue (i) Simple average and (ii) weighted average methods.
2-8-13 Opening stock 800 unit at 4.20
3-8-13 Purchases 800 unit at 4.20
4-8-13 Issued 1,200 units.
6-8-13 Purchased 1,600 units at 4.80
7-8-13 Issued 1,000 units.
9-8-13 Purchased 400 units at 6.00
11-8-13 Issued 800 units
13-8-13 Issued 100 units
15-8-13 Purchased 500 units at 8.00
10) From the particulars given below write up the stores ledger card :
2017
January 1 opening stock 1,000 units at Rs. 26 each
5 purchased 500 units at Rs. 24.50 each
7 Issued 750 units
10 purchased 1,500 units at Rs. 24 each
12 Issued 1,100 units.
15 purchased 1,000 units at Rs. 25 each.
17 Issued 500 units.
18 Issued 300 units.
25 purchased 1,500 units at Rs. 26 each.
29 Issued 1,500 units.
Adopt the FIFO method of issue and ascertain the value of the closing stock.
11) The “received” side of the stores ledger account shows the following particulars:
Jan 1 Opening balance: 500 units @rs4
Jan 5 Received from vendor:200 units @rs4.25
Jan 12 Received from vendor:150 units @rs4.10
Jan 20 Received from vendor:300 units @rs4.50
Jan 25 Received from vendor:400 units @rs4
Issues of material were as follows:
Jan 4- 200 units; Jan 10- 400;Jan 15-100;Jan 19- 100 units; Jan 26- 200 units ;
Jan 30- 250 units. issues are to be priced on the principle of ‘first in first out’. Write
3
out the stores ledger account in respect of the materials for the month of January.
12)The stock in hand of a material as on 1st September, 2017,was 500 units at re.1 per unit.
the following purchases and issues were subsequently made. prepare the store ledger account.
showing how the value of the issues would be recorded under [a] FIFO and [b]LIFO methods.
purchased Issues
September6 100 units at rs 1.10 September9 500 unit
September20 700 units at rs 1.20 September22 500 unit
September27 400 units at rs 1.30 September30 500 unit
October 13 1,000 units at rs1.40 October 15 500 units
October20 500 units at rs 1.50 October22 500 units
November17 400 units at rs1.60 November11 500 units
13)The following transactions occur in the purchase and issue of a material:
Jan 2 Purchased 4,000 units @ Rs 4.00 per units
Jan 20 Purchased 500 units @Rs 5.00 per units
Feb 5 Issued 2,000 units
Feb 10 Purchased 6,000 units @ Rs 6.00 per units
Feb 12 Issued 4,000 units
March 2 Issued 1,000 units
March 5 Issued 2,000 units
March 15 Purchased 4,500 units @ Rs 5.50 per units
March 20 Issued 3,000 units.
From the above, prepare the store ledger account under HIFO Method.
14) Adarsh company purchased and issued the material in the following order:
units unit cost
Rs.
st
1 January purchased 300 3.00
5th January purchased 600 4.00
th
10 January Issue 500 _
12th January purchased 700 4.00
15th January Issue 800 _
20th January purchased 300 5.00
30th January Issue 100 _
Ascertain the quantity of closing stock as on 31st January and state its value under each of the
following methods of pricing the issue : [a] weighted average cost [b]FIFO [c]LIFO.
15) Show the stores ledger entries as they would appear when using:
[a] the weighted average method, [b] the simple average method, and
[c] the LIFO method Of pricing issues, in connection with the following transactions:
unit price
Rs.
April 1 Balance in hand b/f 300 2.00
April 2 purchased 200 2.20
4
April 4 Issued 150 _
April 6 purchased 200 2.30
April11 Issued 150 _
April19 Issued 200 _
April22 purchased 200 2.40
April27 Issued 150 _
In a period of rising prices such as the above, what are the effects of each method?
16) The following transactions took place in respect of on item of material:
Receipts Rate Issue
quantity Rs quantity
2.9.18 200 2.00 _
10.9.18 300 2.40 _
15.9.18 250
18.9.18 250 2.60 _
20.9.18 200
Record the above transactions in the stores ledger, pricing the issues at:
[a] simple average rate [b]weighted average rate.
Formula: EOQ = √2 CO❑
I
Q = Quantity to be ordered.
C= Consumption of material concerned in units during a year.
O = Cost of placing one order including the cost of receiving goods i.e. costs of getting an item
into the firm’s inventory.
I = Interest payment including variable cost of storing per unit per year i.e. holding costs of
inventory.
17)Find out the economic order quantity(EOQ)from the following particulars:
Annual usage :6,000units
Cost of material per unit :Rs. 20
Cost of placing and receiving one order :Rs. 60
Annual carrying cost of one unit :10% of Inventory value.
18)Find out the economic order quantity , the number of order per year and their frequency
from the following information:
Monthly consumption 3,000 units
Cost per unit :Rs.54
Ordering cost :Rs150 per order.
Inventory carrying cost 20% of the average inventory.
19) You are required to compute the economic ordering quantity and the frequency of the orders
in terms of days, from the data given below :
Consumption of material per annum :Rs 8,000
5
Ordering costs per order :Rs. 25
Storage and carrying cost per annum 10% of inventory value.
20) From the following particulars,calculate the economic order quantity and tabulate your
results: Annual requirements :1,600 units, Cost of materials per units :rs 40, Cost of
placing and receiving one order: rs 50, Annual carrying cost of inventory :10% of
inventory value.
21)calculate e.o.q from the following :[a]consumption during the year=600 units
[b]ordering cost rs 12 per order [c]carrying cost 20% [d]price per units rs 20.
22)Find out the economic order quantity , the number of order per year and their frequency
from the following information:
Monthly consumption 3,000 units
Cost per unit :Rs.54
Ordering cost :Rs150 per order.
Inventory carrying cost 20% of the average inventory.
23) You are required to compute the economic ordering quantity and the frequency of the orders
in terms of days, from the data given below :
Consumption of material per annum :Rs 8,000
Ordering costs per order :Rs. 25
Storage and carrying cost per annum 10% of inventory value.
FORMULAS
1. Ordering level = Minimum level +consumption during the time required to get the fresh
deliver.
[Link]-ordering level=Maximum consumption * maximum re-order period
[Link][or safety stock] level:
Minimum stock level = Re-ordering level-[normal consumption*normal re-order period].
[Link] stock level: =Reordering level +re-ordering quantity- minimum
consumption*minimum Re-ordering period.
[Link] level:=Average consumption*[Link]-order period for emergency
purchases.
6..Average stock level =minimum stock level+½ of re-order quantity
or ½ [minimum stock level +maximum stock level]
24)Two components X and Y are used as follows :
Minimum usage : 50 units per week each.
Maximum usage : 150 units per week each.
Normal usage : 100 units per week each.
Ordering quantities : X – 600 units.
: Y – 1,000 units.
Delivery period : X – 4 to 6 weeks.
6
: Y – 2 to 4 weeks.
Maximum reorder period for emergency purchases X : 2 weeks Y: 2 weeks.
Calculate for each components: a)Reordering level b)Maximum level c)Minimumlevel
d) Danger level
25)From the following information calculate a)Economic order quantity b) Reorder level
c)Maximum level d)Minimum level
Normal usage 150 units per day. Minimum usage 100 units per day. Maximum usage 200
units per day. Reorder period 50 to 60 days. The annual usage is 50,000 units. The cost
of purchase is Rs. 100 per order. Cost per unit is Re. 1.00. carrying cost is 10% p.a.
26) About 50 items are required every day for a machine. a fixed cost of rs.50 per order is
incurred for placing an order. the inventory carrying cost per item amounts to re.0.02 per day.
the lead period is 32 days. compute: [Link] order quantity [Link]-order level.
27)Find out the ordering level from the following:[a]minimum stock 1,000units.
[b]maximum stock of 2,000 units:[c]time required for receiving the material 15 days:
[d]daily consumption of material 50 units.
28) Calculate maximum level, minimum level and reordering level from the following data:
Re-order quantity 1,500 units
Re-order period 4 to 6 weeks
Maximum consumption 400 units per week
Normal consumption 300 units per week
Minimum consumption 250 units per week
29) Two components a and b are used as follows:
Average consumption 40 units
Normal usage 500 units per week each
Minimum usage 25 units per week each
Maximum usage 75 units per week each
Re-order quantity a:300 units b:500 units
Re-order period a:4 to 6 weeks b:2 to 4 weeks
Maximum lead time for Emergency purchases: a:1 day b:two days
Calculate for each component:[a]re-order level,[b]minimum level,[c]maximum level,[d] average
stock level,[e]and danger level.
30) From the following particulars, calculate:
[a] Re-order level [b] Minimum level [c] Maximum level
Normal usage 100 units per day
Minimum usage 60 units per day
Maximum usage 130 units per day
Economic order quantity 5,000 units
Re-order period 25 to 30 days