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:r
Dater
Receiptsr
Costr
Dater
Issuesr
Pricer
r
3 Januaryr
150 unitsr
K220r
5 Januaryr
300 unitsr
K250r
r
10 Januaryr
200 unitsr
K230r
25 Januaryr
230 unitsr
K250r
r
On 31st December 2019, there were 200 units valued at K200 per unit in stock.r
Calculate the gross profit using LIFO and AVCO methods of inventory valuation.r
13. The following information has been taken from Duncans financial statements for the year- ended 31 December 2017:r
Duncan has inventory turnover of six timesr
The year-end receivables collection period is 42 days Cost of sales for the year was K1,690,000r
Credit purchases for the year were K2,150,000 Duncans cash cycle at 31 December 2017 was 68daysr
All calculations should be made to the nearest full day, and the trading year has 365 days.r
What is Duncans trade payables collection period as at 31 December 2017?r
r
14. The following extracts of the financial statements of Mafishi have been obtained:r
r
Revenuer
K980,000r
r
Cost of salesr
(K530,000)r
r
Operating expensesr
(K210,000)r
r
Equityr
K600,000r
r
Loan, repayable 2022r
K300,000r
r
Deferred taxr
K44,000r
r
Payablesr
K46,000r
r
What is the return on capital employed of Mafishi?r
r
15. Mafishi Co has calculated that its current year Price Earnings (P/E) ratio is 12.6. The sector average P/E ratio is 10.5r
Which ONE of the following would be an explanation of the difference between Mafishisr
P/E ratio and the sector average?r
A.Mafishi is seen as a less risky investment than the sector average, and there is higher confidence about the future prospects of Mafishi.r
B.Mafishi is seen as a more risky investment than the sector average, however there is higher confidence about the future prospects of Mafishi.r
C. Mafishi is seen as a less risky investment than the sector average, however there is low confidence about the future prospects of Mafishi.r
D. Mafishi is seen as a more risky investment than the sector average, and there is low confidence about the future prospects of Mafishi.r