Like the title says I would like to find out how to make inventory adjustments using perpetual inventory valuation and FIFO costing method. The last time we tried to make an inventory adjustment, it made all sorts of crazy inventory postings that practically ruined our balance sheet and I would like to find out if there are any steps we should take to avoid this sort of mess in the future as we usually have to make a lot of  adjustments in our organization.

We would appreciate any guidelines to making inventory adjustments when running perpetual inventory valuation and FIFO costing method. Also, how to correct the balance sheet figures when erroneous postings like these are made. Thank you.