1. **State the problem:** We need to prepare a store ledger for July 2012 under the LIFO (Last In, First Out) method using the given receipt and issue data. 2. **List the transactions:** - Opening balance (July 1): 500 units @ 10 - Purchase (July 3): 700 units @ 10.50 - Issue to Dept A (July 4): 400 units - Return to supplier (July 8): 50 units - Purchase (July 7): 650 units @ 11.00 - Purchase (July 12): 600 units @ 12.00 - Issue to Dept B (July 14): 500 units - Return to store from Dept B (July 16): 25 units - Issue to Dept A (July 20): 500 units - Issue to Dept B (July 24): 525 units - Shortage (July 25): 20 units 3. **Apply LIFO method:** For each issue, consume units starting from the most recent purchase first. 4. **Calculate stock layers after each transaction:** - Opening stock: 500 units @ 10 - July 3 purchase adds 700 units @ 10.50 Stock layers: 700 @ 10.50; 500 @ 10 - July 4 issue 400 units: Consume from 700 @ 10.50 => remaining 700 - 400 = 300 @ 10.50 Stock layers now: 300 @ 10.50; 500 @ 10 - July 7 purchase adds 650 units @ 11.00 Stock layers: 650 @ 11.00; 300 @ 10.50; 500 @ 10 - July 8 return to supplier 50 units: Return decreases purchase layers. Assume return from oldest purchase (FIFO in return?), so from 500 @ 10 => 500 - 50 = 450 @ 10 Stock layers: 650 @ 11.00; 300 @ 10.50; 450 @ 10 - July 12 purchase adds 600 units @ 12.00 Stock layers: 600 @ 12.00; 650 @ 11.00; 300 @ 10.50; 450 @ 10 - July 14 issue 500 units: Consume from newest layers: From 600 @ 12.00: consume 500 units (600 - 500 = 100 left) Stock layers: 100 @ 12.00; 650 @ 11.00; 300 @ 10.50; 450 @ 10 - July 16 return from dept B: 25 units returned Add 25 units @ last issued price (assume 12.00) Stock layers: 125 @ 12.00; 650 @ 11.00; 300 @ 10.50; 450 @ 10 - July 20 issue 500 units: Consume newest layers: From 125 @ 12.00: consume 125 units (0 left) Remaining to consume: 500 - 125 = 375 From 650 @ 11.00: consume 375 units (650 - 375 = 275 left) Stock layers: 275 @ 11.00; 300 @ 10.50; 450 @ 10 - July 24 issue 525 units: Consume newest layers: From 275 @ 11.00: consume 275 (0 left) Remaining: 525 - 275 = 250 From 300 @ 10.50: consume 250 (300 - 250 = 50 left) Stock layers: 50 @ 10.50; 450 @ 10 - July 25 shortage 20 units: Reduce from oldest layers (assume from 450 @ 10): 450 - 20 = 430 Stock layers: 50 @ 10.50; 430 @ 10 5. **Final stock balance on July 25:** - 50 units @ 10.50 - 430 units @ 10 Total units: $50 + 430 = 480$ units 6. **Calculate total value:** $$ (50 \times 10.50) + (430 \times 10) = 525 + 4300 = 4825 $$ **Answer:** The closing stock on July 25 under LIFO is 480 units valued at 4825.