Question
Vine plc. produces a single product. The following information on inventory, purchases, and sales are available
Vine plc. produces a single product. The following
information on inventory,
purchases, and sales are available for the month of
January 2018.
DATE
TRANSACTION
NUMBER
OF UNITS
UNIT
COST
SALES
PRICE
€
€
January 2
Inventory
13,000
10.40
January 3
Purchases
5,000
10.55
January 5
Purchases
14,000
10.68
January 10
Sales
22,000
12.20
January 20
Purchases
17,000
10.75
January 23
Sales
9,000
12.40
January 25
Sales
15,000
12.55
January 28
Purchases
11,000
11.00
January 31
Sales
12,000
13.00
Required:
(a) For the month of January, compute the inventory
balance, cost of sales and gross
profit using both the First in First out and weighe
d average methods of inventory
valuation.
(12 marks)
(b) According to accounting principles, profit is d
etermined by matching costs with
related revenues. In your opinion, does IAS 2
Inventories
meet this objective?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
a FirstinFirstout FIFO Method Inventory balance January 2 13000 units x 1040 135200 January 3 5000 u...
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Step: 2
Step: 3
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Introduction to Operations Research
Authors: Frederick S. Hillier, Gerald J. Lieberman
10th edition
978-0072535105, 72535105, 978-1259162985
