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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 soldPlease do not simply type out full questions and expect to be provided with a full answer. You must have an answer in the same book in which you found the questions, so ask about whatever it is in the answer that you are not clear about – then I will explain.
Everything needed to be able to answer this question is explained in detail in my free lectures. The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
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
1. The opening inventory is given in the question. It is 100 boxes of 50 bulbs, valued at 14,000,000.
2. You do not need a cost element attached to every issue. When you have done part (a) and calculated the closing inventory, then the cost of sales is opening inventory + total purchases – closing inventory.
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 250 153,000as i said in your examples,issues/sales do not have selling price per say box…..
this is where i get confused.That is not what you wrote before. You wrote that the issues do not have cost element attached.
However as I replied to your previous post it is not needed. You know the value of the opening inventory, you will have calculated the value of the closing inventory, and you can easily calculate the cost of the purchases by adding up the cost of all the purchases from the question.
The cost of sales is then as I wrote in my previous reply.
@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 1.446.00022 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 46.800100 160 16.000
200 154 30.800
13 mar 250 153 38.250 250 153 38.250
550 85.05015 mar 100 160
100 154
200 100 154 15400
250 153 38250
Total Purchases 163.050
Closing Inventory 38250Openning Inventory 70.000.000 (100*50*14,000)
Total Purchases 163.050
Closing Inventory -38.250
Cost of sales 70.124.800It seems OK, but I do not have the time to work through your entire answer.
You really should be using a Revision Kit from one of the ACCA approved publishers – they are full of exam-standard questions together with answers and explanations. It is pointless attempting questions for which you do not have printed answers.
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