Spratley Ltd is a builders’ merchant. On 1 September the business had, as part of its inventories, 20 tonnes of sand at a cost of £18 per tonne and, therefore, at a total cost of

£360. During the first week in September, the business boughtthe following amounts of sand:

On 7 September the business sold 60 tonnes of sand to a local builder.

Required:
Calculate the cost of goods sold and of the remaining inventories using the following costing methods:

(a) first in, first out

(b) last in, first out

(c) weighted average cost. (E-5)

3.6The following is the statement of financial position of TT and Co. at the end of its first year of trading:

During 2012, the following transactions took place:
1 The owners withdrew £20,000 of equity in cash.
2 Premises continued to be rented at an annual rental of £20,000. During the year, rent of £15,000 was paid to the owner of the premises.
3 Rates on the premises were paid during the year as follows: for the period 1 April 2012 to 31 March 2013, £1,300.
4 A second delivery van was bought on 1 January 2012 for £13,000. This is expected to be used in the business for four years and then to be sold for £3,000.
5 Wages totalling £36,700 were paid during the year. At the end of the year, the busi¬
ness owed £860 of wages for the last week of the year.
6 Electricity bills for the first three quarters of the year and £620 for the last quarter of the previous year were paid totalling £1,820. After 31 December 2012, but before the financial statements had been finalised for the year, the bill for the last quarter arrived showing a charge of £690.
7 Inventories totalling £67,000 were bought on credit.
8 Inventories totalling £8,000 were bought for cash.
9 Sales revenue on credit totalled £179,000 (cost £89,000).
10 Cash sales revenue totalled £54,000 (cost £25,000).
11 Receipts from trade receivables totalled £178,000.
12 Payments to trade payables totalled £71,000.
13 Van running expenses paid totalled £16,200.
The business uses the straight-line method for depreciating non-current assets.

Required:
Prepare a statement of financial position as at 31 December 2012 and an income statement for the year to that date. (E-6)

Transcribed Image Text:

Tonnes Cost per tonne 2 September 48 4 September 15 6 September 10 222 20 24 25