FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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A firm has the following transactions with its product R
Year 1
Opening stock: nil
Buys 10 units at GHc 300 per unit
Buys 12 units at GHc 250 per unit
Sells 8 units at GHc 400 per unit
Buys 6 units at GHc 200 per unit
Sells 12 units at GHc 400 per unit
Year 2
Buys 10 units at GHc 200 per unit
Sells 5 units at GHc 400 per unit
Buys 12 units at GHc 150 per unit
Sells 25 units at GHc 400 per unit
Required:
Calculate for both year 1 and year 2 the value of
i. Cost of sales
Using, separately, the weighted average and the FIFO methods of
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- Nonearrow_forwardThe following three identical units of Item JC07 are purchased during April: Item Beta Units Cost April 2 Purchase $264 April 15 Purchase 268 April 20 Purchase 272 Total $804 Average cost per unit $268 ($804 ÷ 3 units) Assume that one unit is sold on April 27 for $367. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost method. Gross Profit Ending Inventory a. First-in, first-out (FIFO) b. Last-in, first-out (LIFO) c. Weighted average cost 3.arrow_forwardNeed helparrow_forward
- 5. Fountain Ltd started a business on 1 December 2020 trading in office water coolers. In the month to 31 December 2020 the following transactions occurred: Tonnes Unit cost Purchases Qty £ 01-Dec 18 22 09-Dec 7 24 20-Dec 10 27 Sales Tonnes Sell price 11-Dec 20 30 22-Dec 11 32 Required: a) Calculate the gross profit for December 2020 and the value of closing inventory on 31 December 2020 using FIFO and AVCO. b) Briefly describe the following inventory valuation methods: i. FIFO ii. LIFO ii. AVCOarrow_forward4arrow_forward
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