QUESTION SIX For six months ended 31st October, 2013, Luanshya Limited (LL), an importer and distributor of one type of printer's machine has the following transactions in his records. There was an opening balance of 100 units which had a value of K3,900. Cost per Unit K Date May June August Date Each K July Bought Quantity in Units 100 200 September October 400 The price of K51 875 each for the August receipt was K6.125 per unit less than the normal price because of the large quantity ordered. Sold Quantity in Units 250 41 50 51.875 350 100 64 74 70 Price Required: (a) Prepare the stores ledger records using weighted average, FIFO and LIFO methods, showing clearly inventory balance. (9 marks) (b) Prepare the trading account for the period to show the gross profit using each of the three above. methods (9 marks) (c) Based on the calculations in (b) comment on the method which can be regarded as the best measure of profit. (2 marks) [Total: marks] 20

QUESTION SIX For six months ended 31st October, 2013, Luanshya Limited (LL), an importer and distributor of one type of printer's machine has the following transactions in his records. There was an opening balance of 100 units which had a value of K3,900. The price of K51 875 each for the August receipt was K6.125 per unit less than the normal price because of the large quantity ordered. Required: (a) Prepare the stores ledger records using weighted average, FIFO and LIFO methods, showing clearly inventory balance. (9 marks) (b) Prepare the trading account for the period to show the gross profit using each of the three methods above. ( 9 marks) (c) Based on the calculations in (b) comment on the method which can be regarded as the best measure of profit. (2 marks) [Total: 20 marks]