QUESTION ONEAt beginning of July 2021, Idah & Faith (IF) Co had 25 microwave ovens in inventory costing ofK750 per unit. Over the next three months, the company made the following purchases.DateQuantityUnit costK6 July7705 August48001 September8.85014 September6.880During that period, there were sales of 35 units, generating a total sales revenue of K38,500.REQUIRED:a) Prepare the stores ledger card for the materials in stock that record all material movementsusing:(i) FIFO method(ii) LIFO methodb) Based on the work done in (a) above, determine the cost of sales and profit for three months to30 September using FIFO and also based on LIFO.c) Compare the reported profit of the company in (b) above over the three months to 30 Septemberbased on the two methods (FIFO and LIFO) and comment on the results.

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Description: QUESTION ONEAt beginning of July 2021, Idah & Faith (IF) Co had 25 microwave ovens in inventory costing ofK750 per unit. Over the next three months, the company made the following purchases.DateQuantityUnit costK6 July7705 August48001 September8.850

FIFO is first in first out method of inventory valuation. In this method the…

Answered: At beginning of July 2021. Idah & Faith…

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At beginning of July 2021. Idah & Faith (IF) Co had 25 microwave ovens in inventory costing of

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 8P: Comprehensive The following information for 2019 is available for Marino Company: 1. The beginning...

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At beginning of July 2021, Idah & Faith (IF) Co had 25 microwave ovens in inventory costing of K750 per unit. Over the next three months, the company made the following purchases.Date Quantity Unit cost K6 July 5 770 5 August 4 800 1 September 8 850 14 September 6 880 During that period, there were sales of 35 units, generating a total sales revenue of K38,500. REQUIRED: a) Prepare the stores ledger card for the materials in stock that records all material movements using: (i) FIFO method (ii) LIFO method b) Based on the work done in (a) above, determine the cost of sales and profit for three months to 30 September using FIFO and also based on LIFO. c) Compare the reported profit of the company in (b) above over the three months to 30 September based on the two methods (FIFO and LIFO) and comment on the results Explain each of these cost…
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