[munyandekwe]

Muhanga Ltd. operates with a significant network of retail branches.In the financial statements for future years,Muhanga 2Ltd proposes to change the determination of cash generating unit (CGU) for impairment testing purposes at the level of each product line, rather than at each individualI branch. In the proposal, the determinationr of the CGUs will now be based the fact that each of the individual branches of Muhanga Ltd does not operate on a standalone basis as some income such as avolume rebates and costs are dependent on the nature of the product line rather than on individual branches. Muhanga Ltd considers that cash inflows and outflows for individual branches do not provide an accurate assessment of actual cash generated by those branches. However, Muhanga Ltd has daily sales information and monthly statements of profit or loss produced for each individual branch and this information is used to make decisions about continuing to operate individual branches. Required: With justification, advise Muhanga Ltd whether the proposed change to the to the accounting practice relating to the treatment of CGUs is acceptable under IFRS

[munyandekwe]

@karuhanga said:
SREC deals in buying&distribution of solar products.It buys solar bulbs which are packed in boxes,each box contains 50 bulbs.Opening inventory was 100 boxes valued at 14,000,000 on 01-Jan 2018.The following transactions occurred from Jan to March 2018:
Purchase/Receipt Purchase/Receipt
Date: Qty: Price Per box Date: Qty: Selling Price Per box
10-Jan 100 150,000 22-Jan 300 170,000
20-Jan 200 155,000
3-Feb 300 160,000 10-Feb 300 180,000
28-Feb 200 154,000 15-Mar 200 190,000
13-Mar 250 153,000
Using FIFO,determine the value of:
1) Closing inventory as at 31-March 2018
2) Cost of goods sold
Response
Purchese Issues/sales Balance
Date Qty Price(000) Amout(000) Qty Price Amout(000)
Openning 100 14.000 1.400.000
10 jan 100 150 15.000 100 150 15.000
20 jan 200 155 31.000 200 155 31.000
46.000 400 1.446.000

22 jan 100 14000
100 150
100 155
300 100 155 15.500
03 feb 300 160 48.000 300 160 48.000
400 63.500
10 feb 100 155
200 160
300 100 160 16000
28 feb 200 154 30.800 200 154 30800
300 46.800

100 160 16.000
200 154 30.800
13 mar 250 153 38.250 250 153 38.250
550 85.050

15 mar 100 160
100 154
200 100 154 15400
250 153 38250
Total Purchases 163.050
Closing Inventory 38250

Openning Inventory 70.000.000 (100*50*14,000)
Total Purchases 163.050
Closing Inventory -38.250
Cost of sales 70.124.800

[munyandekwe]

thank you let me try to calculate it.
will come back with what i think.

[munyandekwe]

let me explain this once again;

purchase issues/sales
date qty price per box date qty selling price per box
10-jan 100 150,000 22-jan 300 170,000
20-jan 200 155,000
03-mar 300 160,000 10-feb 300 180,000
28-feb 200 154,000 15-mar 200 190,000
13-mar 250 153,000

as i said in your examples,issues/sales do not have selling price per say box…..
this is where i get confused.

[munyandekwe]

dear mr.john,what confuses me in this question are transactions involving issuing out that have have cost element attached.

when you look at your examples,issues dont have cost element attached in their computation.

again in this question i dont understand how to get the openning stock!

thanks

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