A junior member of staff has prepared accounts for a client for the month of
November 2020. The accounts report a profit of P48 544 and closing capital of
P127 529, based on a closing inventory valuation of P156 000. The closing
inventory valuation was calculated using the periodic weighted average
method. However, the first in, first out (FIFO) method should have been used.
Inventory movements were:
Date Purchases Sales
Units Cost per unit (P) Units
5 November 1 000 132·80
10 November 200
16 November 800 130·00
18 November 900
21 November 500 132·00
26 November 600
Opening inventory was 600 units, with a total value of P74 400.
Required:
Calculate the corrected value of:
i. closing inventory
A junior member of staff has prepared accounts for a client for the month of
November 2020. The accounts report a profit of P48 544 and closing capital of
P127 529, based on a closing inventory valuation of P156 000. The closing
inventory valuation was calculated using the periodic weighted average
method. However, the first in, first out (FIFO) method should have been used.
Inventory movements were:
Date Purchases Sales
Units Cost per unit (P) Units
5 November 1 000 132·80
10 November 200
16 November 800 130·00
18 November 900
21 November 500 132·00
26 November 600
Opening inventory was 600 units, with a total value of P74 400.
Required:
Calculate the corrected value of:
i. closing inventory
Related questions
Carl's Calculator Xpress sells non-programmable calculators.(His target market: Accounting 209 students who forgot theircalculators on Thursday nights.) Carl's has the followinginformation available for the month of November:
# of units | Cost per unit | |
Beginning inventory, November 1 | 5 | $2.00 |
Purchase, November 11 | 8 | $2.50 |
Purchase, November 24 | 10 | $3.00 |
Ending inventory, November 30 | 3 |
What is the total amount of goods available for sale that Carl'smust allocate between cost of goods sold and ending inventory?
a.
$20
b.
$23
c.
$50
d.
$60
e.
none of the above
Assume Carl's is using the FIFO cost flow method. What amountwill Carl's report as cost of goods sold for November?
| a. | $40 | |
| b. | $51 | |
| c. | $52 | |
| d. | $54 | |
| e. | none of the above |
assume instead that the company uses the LIFO inventory costflow method. What amount will Carl report as Inventory on thecompany's November 30 balance sheet?
| a. | $6 | |
| b. | $9 | |
| c. | $51 | |
| d. | $54 | |
| e. | none of the above |
but assume instead that the company uses the weighted averagecost flow method. Carl's sells all calculators for $6 each. Whatamount will Carl's report as gross profit for November? (round costper unit to 2 decimals, and final answer to whole dollars)
| a. | $44 | |
| b. | $66 | |
| c. | $68 | |
| d. | $70 | |
| e. | none of the above |
