1. **Problem Statement:** We need to value the closing inventory using the FIFO (First In, First Out) method given the following data: - Opening inventory: 10 units at 2 each - Purchases: 30 units at 3 each - Issues: 12 units, then 8 units 2. **FIFO Method Explanation:** FIFO assumes that the oldest inventory items are issued first. So, when units are issued, we first reduce from the opening inventory, then from the purchases. 3. **Calculate total units available:** Opening inventory units = 10 Purchases units = 30 Total units available = 10 + 30 = 40 units 4. **Calculate total units issued:** Issues = 12 + 8 = 20 units 5. **Calculate closing inventory units:** Closing inventory units = Total units available - Total units issued = 40 - 20 = 20 units 6. **Determine which units remain in closing inventory using FIFO:** - First, 10 units from opening inventory were issued (all 10 units are used up because 12 units were issued first, so 10 from opening inventory and 2 from purchases) - Then, 2 units from purchases were issued (to complete the first issue of 12 units) - Next, 8 units issued come from purchases So total issued from purchases = 2 + 8 = 10 units 7. **Calculate remaining units from purchases:** Purchases units = 30 Issued from purchases = 10 Remaining purchases units = 30 - 10 = 20 units 8. **Value closing inventory:** All remaining 20 units are from purchases at 3 each. Closing inventory value = 20 units * 3 = 60 **Final Answer:** The closing inventory value using FIFO is **60**.