Q.From the following data, prepare a Stores Ledger Account under the FIFO (First-in-First-out) Method:
Jan 1: Opening stock 100 units @ ₹10
Jan 5: Purchased 200 units @ ₹12
Jan 10: Issued 150 units
Jan 15: Purchased 150 units @ ₹14
Jan 20: Issued 200 units
Jan 25: Purchased 100 units @ ₹16
Jan 28: Issued 100 units

Under FIFO, the earliest-purchased material is assumed to be issued first, so each issue is priced at the oldest available rate.

Pricing each issue from the oldest layer still in stock — the Jan 10 issue of 150 units draws on the opening 100 units @ ₹10 plus 50 units @ ₹12 (cost ₹1,600); the Jan 20 issue of 200 units draws on the remaining 150 units @ ₹12 plus 50 units @ ₹14 (cost ₹2,500); and the Jan 28 issue of 100 …

Under the FIFO (First-in-First-out) Method, it is assumed that whichever lot of material was received EARLIEST is issued FIRST — so every issue is priced starting from the oldest layer of stock still remaining, moving to progressively newer layers only after the older ones are exhausted.

Working for each issue:

• Jan 10 (issue 150 units): fully consumes the opening 100 units @ ₹10 (= ₹1,000), then draws 50 units from the Jan 5 lot @ ₹12 (= ₹600). Issue cost = 1,000 + 600 = ₹1,600. Balance after this issue: 150 units remaining from the Jan 5 lot @ ₹12 = ₹1,800.
• Jan 20 (issue 200 units): fully consumes the remaining 150 units @ ₹12 (= ₹1,800), then draws 50 units from the Jan 15 lot @ ₹14 (= ₹700). Issue cost = 1,800 + 700 = ₹2,500. Balance after this issue: 100 units remaining from the Jan 15 lot @ ₹14 = ₹1,400. …

A common error under FIFO is pricing an issue at the CURRENT (latest) purchase rate instead of the OLDEST remaining rate — remember FIFO always clears out the earliest layer first, so an issue that spans two lots must be split and priced pa …