80.2K

Verified Solution

Link Copied!

QUESTION $2$

$(30$ Marks$)$

Gabex is a retailer buying and selling leather handbags. The following information relates to the month ended $29$ February $2024.$

$\backslash$table$[[$Date$,,$No$.$ of units,Cost per unit$],[1$ Feb,Opening inventory,$45,$R$80\mathrm{.}24],[5$ Feb,Credit purchase,$75,$R$88\mathrm{.}50],[8$ Feb,Purchase return,$8,$R$88\mathrm{.}50],[25$Feb,Credit purchase,$38,$R$82\mathrm{.}60]]$

On $29$ Feb $2024,88$ units were on hand. The net realisable value of these items was R$82\mathrm{.}60$ per unit.

Additional Information:

The only sale during the month of Feb $2024$ was a sale of $62$ units on $15$ Feb $2024.$ Required;

a$)$

$(3$ marks$)$

Determine the cost of closing inventory on the FIFO cost allocation method.

b$)$

$(7$ marks$)$

Prepare the cost of sales and inventory accounts in the General Ledger for the month ended $29$ Feb $2024,$ using the FIFO cost allocation method, assuming the periodic recording system was used. $($Adjusting and closing entries should be included$)$

c$)$

$(10$ marks$)$

Prepare the cost of sales and inventory accounts in the General Ledger for the month ended $30$ Feb $2024,$ using the FIFO cost allocation method, assuming the perpetual recording system was used. $($Adjusting and closing entries should be included$)$

$5$

HFAC$130-1-$JanJun$2024-$FA$1-$GC$-$V$\mathrm{.}2-07022024$

d$)$

$(10$ marks$)$

Prepare the cost of sales and inventory accounts in the General Ledger for the month ended $29$ Feb $2024,$ using the weighted average cost allocation metb assuming the perpetual recording system was used. $($Adjusting and closing should be included$)$

Round off answers to the nearest rand.

Answer & Explanation Solved by verified expert

See Answer