Answered step by step
Verified Expert Solution
Question
1 Approved Answer
can you give me with a explanation please. North Sdn. Bhd. is a company dealing in toys. The following transactions occurred in the 12-month period
can you give me with a explanation please.
North Sdn. Bhd. is a company dealing in toys. The following transactions occurred in the 12-month period ended 31 December 2020: January Opening inventory 5 units at costs of RM80 each Units Bought Units Sold February 10 units at RM86.00 each June 6 units at RM130 each October 4 units at RM90.50 each November 3 units at RM140 each You are required to : (a) Draw up a stores ledger account to record the above transaction, compute the value of the cost of goods sold and the closing inventory based on weighted average (WA) method. (5 marks) (b) Calculate the value of the cost of goods sold and the closing inventory based on the first in first out (FIFO) method, show workings without drawing the stores ledger account (3 marks) (c) Calculate the gross profit from selling the toys in the year 2020 using the WA and FIFO method respectively. Show workings in tabular form. (3 marks) (d) Explain why the FIFO method of inventory valuation results in a higher closing inventory value and a higher profit than using the last in first out (LIFO) method, in times of inflation. (2 marks)Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started