Chimwasu Ltd sells pure olive oil to wholesale shops in the Kitwe Business District. During the month of January 2020, the following inventory was received and issued:

Date

Receipts

Cost

Date

Issues

Price

3 January

150 units

K220

5 January

300 units

K250

10 January

200 units

K230

25 January

230 units

K250

On 31st December 2019, there were 200 units valued at K200 per unit in stock.

Calculate the gross profit using LIFO and AVCO methods of inventory valuation.

13. The following information has been taken from Duncans financial statements for the year- ended 31 December 2017:

Duncan has inventory turnover of six times

The year-end receivables collection period is 42 days Cost of sales for the year was K1,690,000

Credit purchases for the year were K2,150,000 Duncans cash cycle at 31 December 2017 was 68days

All calculations should be made to the nearest full day, and the trading year has 365 days.

What is Duncans trade payables collection period as at 31 December 2017?

14. The following extracts of the financial statements of Mafishi have been obtained:

Revenue

K980,000

Cost of sales

(K530,000)

Operating expenses

(K210,000)

Equity

K600,000

Loan, repayable 2022

K300,000

Deferred tax

K44,000

Payables

K46,000

What is the return on capital employed of Mafishi?

15. Mafishi Co has calculated that its current year Price Earnings (P/E) ratio is 12.6. The sector average P/E ratio is 10.5

Which ONE of the following would be an explanation of the difference between Mafishis

P/E ratio and the sector average?

A. Mafishi is seen as a less risky investment than the sector average, and there is higher confidence about the future prospects of Mafishi.

B. Mafishi is seen as a more risky investment than the sector average, however there is higher confidence about the future prospects of Mafishi.

C. Mafishi is seen as a less risky investment than the sector average, however there is low confidence about the future prospects of Mafishi.

D. Mafishi is seen as a more risky investment than the sector average, and there is low confidence about the future prospects of Mafishi.