1. **Problem Statement:** Calculate the closing inventory for Masterly Enterprises for March 2024 using the FIFO (First In, First Out) inventory method. 2. **FIFO Method Explanation:** FIFO assumes that the oldest inventory items are sold first. Therefore, closing inventory consists of the most recent purchases. 3. **Transactions Summary:** - Opening balance: 880 units @ 9 - Purchases and sales as given 4. **Step-by-step FIFO Calculation:** - Opening inventory: 880 units @ 9 - 2 Mar purchase: 300 units @ 6 - 4 Mar sell: 400 units (sold from opening stock first) - Remaining opening stock: 880 - 400 = 480 units @ 9 - 6 Mar sell: 600 units - Sell remaining 480 units @ 9 - Then sell 120 units from 2 Mar purchase @ 6 - Remaining 2 Mar purchase: 300 - 120 = 180 units @ 6 - 10 Mar purchase: 400 units @ 8 - 15 Mar purchase: 500 units @ 5 - 22 Mar sell: 900 units - Sell 180 units @ 6 (remaining from 2 Mar purchase) - Sell 400 units @ 8 (10 Mar purchase) - Sell 320 units @ 5 (from 15 Mar purchase) - Remaining 15 Mar purchase: 500 - 320 = 180 units @ 5 - 24 Mar purchase: 800 units @ 7 - 25 Mar sell: 600 units - Sell 180 units @ 5 (remaining from 15 Mar purchase) - Sell 420 units @ 7 (from 24 Mar purchase) - Remaining 24 Mar purchase: 800 - 420 = 380 units @ 7 - 27 Mar purchase: 200 units @ 2 - 28 Mar sell: 100 units - Sell 100 units @ 7 (from 24 Mar purchase) - Remaining 24 Mar purchase: 380 - 100 = 280 units @ 7 - 30 Mar purchase: 900 units @ 3 - 31 Mar sell: 700 units - Sell 280 units @ 7 (remaining from 24 Mar purchase) - Sell 200 units @ 2 (27 Mar purchase) - Sell 220 units @ 3 (from 30 Mar purchase) - Remaining 30 Mar purchase: 900 - 220 = 680 units @ 3 5. **Closing Inventory Composition:** - 680 units @ 3 6. **Calculate Closing Inventory Value:** $$\text{Closing Inventory} = 680 \times 3 = 2040$$ **Final Answer:** The closing inventory for March 2024 using FIFO is 680 units valued at 2040.