Maxim Company needed 3500 units of raw material every month starting from January till June due to the orders which it has received from a customer and also to satisfy the regular demand the company has. The company started to place its order with different suppliers as it was not able to find a single supplier to satisfy all its needs. They have to procure the raw materials from different suppliers at the prevailing market price. In the month of January and February, they purchased at the rate of RO12.25 per unit and RO.12.40 per unit respectively. Due to high demand for raw materials in March, they have to pay RO.12.70 per unit. But the prices in April and May were less when compared with March which stood at RO 12.5 per unit and RO 12.55 per unit respectively. In June, the company has bought the raw materials at RO 12.65 per unit. All the raw materials purchased are converted in to finished goods in that particular month itself. In order to convert the raw materials purchased to finished goods, the company has to spend an additional cost of 250 baiza for each unit. However, the company already had 3000 units of older stock that was purchased at RO 10 each (additional cost for manufacturing is included). The company sold 3900 units @ RO 14.5 per unit in February, 4600 units @ RO15.75 per unit in April and in June 5068 units @ RO16.25 per unit .The Company follows LIFO method of inventory valuation. 1-You are required to calculate ending inventory for the above transactions ? 2-You are required to prepare Journal entries for the above Question No.1 using perpetual and periodic inventory system?
Maxim Company needed 3500 units of raw material every month starting from January till June due to the orders which it has received from a customer and also to satisfy the regular demand the company has. The company started to place its order with different suppliers as it was not able to find a single supplier to satisfy all its needs. They have to procure the raw materials from different suppliers at the prevailing market price. In the month of January and February, they purchased at the rate of RO12.25 per unit and RO.12.40 per unit respectively. Due to high demand for raw materials in March, they have to pay RO.12.70 per unit. But the prices in April and May were less when compared with March which stood at RO 12.5 per unit and RO 12.55 per unit respectively. In June, the company has bought the raw materials at RO 12.65 per unit. All the raw materials purchased are converted in to finished goods in that particular month itself. In order to convert the raw materials purchased to finished goods, the company has to spend an additional cost of 250 baiza for each unit. However, the company already had 3000 units of older stock that was purchased at RO 10 each (additional cost for manufacturing is included). The company sold 3900 units @ RO 14.5 per unit in February, 4600 units @ RO15.75 per unit in April and in June 5068 units @ RO16.25 per unit .The Company follows LIFO method of
1-You are required to calculate ending inventory for the above transactions ?
2-You are required to prepare
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