July 8: issued 6,000 litres July 9: 14,000 litres @ €2.30 per litre July 20: Issued 7,000 litres July 25: 5,000 litres @ €2.35 per litre. You are required to compute the inventory value on July 31, using each of the following methods (20 Marks): (a) First in First out (2 Marks) (b) Last in First out; and (2 Marks) (c) Average cost method (3 Marks)

July 8: issued 6,000 litres July 9: 14,000 litres @ €2.30 per litre July 20: Issued 7,000 litres July 25: 5,000 litres @ €2.35 per litre. You are required to compute the inventory value on July 31, using each of the following methods (20 Marks): (a) First in First out (2 Marks) (b) Last in First out; and (2 Marks) (c) Average cost method (3 Marks)

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

ChapterC: Cases

Section: Chapter Questions

Problem 1C

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4. Thames Cotton Mills Ltd. take a periodic inventory of their stock at the end of each month. The physical inventory taken on 30th June shows a balance of 1,000 litres of chemicals at hand @ €2.28 per litre. [20 marks] The following transactions took place during July: July 1: 14,000 litres @ €2.30 per litre July 7: 10,000 litres @ €2.32 per litre July 8: issued 6,000 litres July 9: 14,000 litres @ €2.30 per litre July 20: Issued 7,000 litres July 25: 5,000 litres @ €2.35 per litre. You are required to compute the inventory value on July 31, using each of the following methods: (a) First in First out ( (b) Last in First out; and i (c) Average cost method
Thames Cotton Mills Ltd. take a periodic inventory of their stock at the end of each month. The physical inventory taken on 30th June shows a balance of 1,000 litres of chemicals at hand @ €2.28 per litre The following transactions took place during July: July 1: 14,000 litres @ €2.30 per litre July 7: 10,000 litres @ €2.32 per litre July 8: issued 6,000 litres July 9: 14,000 litres @ €2.30 per litre July 20: Issued 7,000 litres July 25: 5,000 litres @ €2.35 per litre. You are required to compute the inventory value on July 31, using each of the following methods (a) First in First out (b) Last in First out; and (c) Average cost method (d) How are the three inventory methods you have used in answering question (a) to (c) above differ from each other? Comment using the answers you generated for each of these three methods, how such answers impact on the gross profit (e) Explain three (3) most important reasons why inventory valuation must be conducted (f) Based on the theory…
The following information is from Teas Window’s financial records. The company buys its raw material on account and pays:• 60% of accounts payable during the month of purchase• 35% in the first month after purchase• 5% in the second month after purchaseMonth PurchasesApril 50,000May 52,000June 60,000July 72,000Compute the estimated total cash disbursements during July. Show your calculations
Halifax Fisheries Inc. began the month of March with $760,000 of current assets, a current ratio of 2.5 to 1, and a quick ratio of 1.1 to 1. During the month, it completed the following transactions:Mar. 6 Bought $86,000 of merchandise on account. (The company uses a perpetual inventory system.) 11 Sold merchandise that cost $70,000 for $118,000. 15 Collected a $30,000 account receivable. 17 Paid a $32,000 account payable. 19 Wrote off a $14,000 bad debt against Allowance for Doubtful Accounts. 24 Declared a $1.75 per share cash dividend on the 41,000 outstanding common shares. 28 Paid the dividend declared on March 24. 29 Borrowed $90,000 by giving the bank a 30-day, 19% note. 30 Borrowed $110,000 by signing a long-term secured note. 31 Used the $200,000 proceeds of the notes to buy additional machinery.Required:Prepare a schedule showing Halifax Fisheries Inc.’s current ratio, quick ratio, and working capital after each of the transactions. (Round ratios to 2 decimal places and other…
Comply plc produces financial statements to 30 June annually. At 30 June 2012 Comply plc's trial balance was as follows: £000 £000 Sales revenue 14,776 Purchases 8,280 Inventory at 1 July 2011 1,390 Distribution cost 1,080 Administrative expenses 1,460 Deferred taxation 100 land at valuation 10,500 Buildings at cost 8,000 Buildings depreciation at 1 July 2011 2,130 Plant and equipment at cost 12,800 Plant and equipment depreciation at 1 July 2011 2,480 Trade receivables and payables 4,096 2,240 Cash at bank 160 Dividends paid 100 Ordinary share capital 14,000 Share premium account 4,000 Revaluation reserve as at 1 July 2011 3,000 Retained earnings 3,140 10% debenture loan 2,000 47,866 47,866 The following matters remain to be adjusted for in preparing the financial statements for the year ended 30 June 2012. 1. Closing inventory at 30 June 2012 amounted to £1,576,000 at cost. A review of inventory…
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Fernando Company developed the following data for the month of August:1. August 1 cash balance P123,000.2. Cash sales in August P800,000.3. Credit sales for August are P300,000; for July P400,000; and for June P400,000. 70% of credit sales are collected in the month of sale, 15% in thefollowing month, and 10% in the second month following the sale. 4. Purchases for July were P500,000 and for August are P400,000. One-fourth of purchases are paid in the month of purchase and the remaining three-quarters in the following month. 5. August salaries are P314,000, utilities are P32,200, and depreciation on the building and equipment is P100,000. Required:4. Anticipated cash balance on August 31.
Fernando Company developed the following data for the month of August:1. August 1 cash balance P123,000.2. Cash sales in August P800,000.3. Credit sales for August are P300,000; for July P400,000; and for June P400,000. 70% of credit sales are collected in the month of sale, 15% in thefollowing month, and 10% in the second month following the sale. 4. Purchases for July were P500,000 and for August are P400,000. One-fourth of purchases are paid in the month of purchase and the remaining three-quarters in the following month. 5. August salaries are P314,000, utilities are P32,200, and depreciation on the building and equipment is P100,000. Required:2. Anticipated total cash available from all sources in August.3. August cash payments for purchases made in July and August.
Use the following information for questions (29 to 32). The following information pertains to Adel Company Month Sales Purchases July P25,000 P10,000 August 10,000 2,500 September 15,000 5,000 October 12,500 4,000 November 15,000 5,000 December 17,500 5,000 Forty percent of purchases are paid for in cash in the month of purchase, and the balance is paid the following month. Cash is collected from customers in the following manner Month of sales 20% Month following sales 50% Two months following sales 25% Amount uncollectible 5% 1. What is the amount disbursed to suppliers in November? 2. If Adel allows a 2 percent cash discount if collected in the month of sale, it is expected that 60 percent will be collected in the month of sale and the balance in the month following. How much will…
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