The purchases and sales of Big Flower Pty Ltd of one brand of lawn fertiliser for the

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The purchases and sales of Big Flower Pty Ltd of one brand of lawn fertiliser for the year ended 31 December 2019 are contained in the schedule below.

The selling price up to 30 June was $12 per unit but was raised to $14 for the rest of the year.

Ignore GST.

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Required

(a) Prepare the income statement up to the gross profit stage under the following cost flow assumptions:
1. periodic inventory i. FIFO ii. weighted average 2. perpetual inventory i. FIFO ii. moving average.

(b) If 10 of the units sold on 9 October were returned and placed back into inventory, how would this affect profits calculated under requirements (a)2(i) and (a)2(ii) above?

(c) If 5 of the units purchased on 11 December were returned to the supplier, how would this affect profits calculated under requirements (a)2(i) and (a)2(ii) above?

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Accounting

ISBN: 9780730363224

10th Edition

Authors: John Hoggett, John Medlin, Keryn Chalmers, Beattie Claire, Hellmann Andreas, Maxfield Jodie

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