Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. the company had 2000 units of a product at the end

The company had 2000 units of a product at the end of 2016.These items were...

90.2K

Verified Solution

Question

Accounting

The company had 2000 units of a product at the end of 2016.These items were bought at K2 per unit.However, these items seem to be damaged and a total of K5,000 have to be spent for them to be sold at K4 each. The following transactions took place during the current period of January 2017 to June 2017. January Sold 1,500 units at K4 each. February received 10,000 units at K3.125 each less 20% trade discount March Sold 8,000 units at K4.00 each less 5% cash discount April Received 15,000 units at K2.70 each net of 20% trade discount May Received 6,500 units at K2.7 each net of 20% trade discount. June Sold 21,800 units at K4.00 each. June Returned 200 units to the supplier who supplied the goods in May Required:

Calculate the inventory valuation at 30th June 2017 using(i) FIFO Method (5 Marks) (ii) LIFO method (5 Marks) (iii) Average Cost Method. (5 Marks) (b) Calculate the trading profit for the period under review using the above three methods of valuation of opening and closing inventory.(6 Marks) (c) Inventory is a graveyard of a business. Discuss this statement (4Marks)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students