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At the end of May 2016 there was in stock 1,200 units of Product PZ25...

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Question

Accounting

At the end of May 2016 there was in stock 1,200 units of Product PZ25 at Jamaica Co Ltd, valued at $200 each. During June 2016, the company sold one unit of the product for $370. The following receipts and sales of the stock item took place during the month:

Date

Receipts

Date

Sales

June 2016

Quantity Total Cost

May 2016

Quantity Sales Price

5

800 $105,000

11

1,400 $420,000

17

1,200 $144,000

21

1,040 $306,800

25

440 $55,000

30

680 $238,000

The accounting records also revealed that the following costs were incurred in the selling of MP250 during June 2016: carriage outwards, $100,000; salaries, $160,000; electricity $72,000.

Required:

(a) Jamaica Co. Ltd stores ledger card showing the values of the receipts, issues and closing stock for the month of June 2016 using the FIFO stock valuation method. (12 marks)
(b) Prepare a statement of profit or loss made from selling PZ25 during the month of June 2016 if $20,000 was pre-paid for electricity while $24,000 was owing for salaries at the end of June 2016. (5 marks)
(c) Define three (3) types of inventories that have to be valued at the end of an accounting period. (3 marks)

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