Purchases of a certain product during July were: Units sold during the month were: Required: Assuming no

Question:

Purchases of a certain product during July were:

July 100 units @ £10.00 100 units @ £9.80 12 15 50 units @ £9.60 20 100 units @ £9.40

Units sold during the month were:

Required:

Assuming no opening inventories:

(i) Determine the cost of goods sold for July under three different valuation methods.

(ii) Discuss the advantages and/or disadvantages of each of these methods.

(iii) A physical inventory count revealed a shortage of five units. Show how you would bring this intoaccount.

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Financial Accounting and Reporting

ISBN: 978-0273744443

14th Edition

Authors: Barry Elliott, Jamie Elliott

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Question Posted: Sep 12, 2012 12:27 AM

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Purchases of a certain product during July were: Units sold during the month were: Required: Assuming no

Question:

July 100 units @ £10.00 100 units @ £9.80 12 15 50 units @ £9.60 20 100 units @ £9.40

Step by Step Answer:

i Receipts Issues Balance Date Quantity Rate Quantity Rate Quantity Rate FIFO 17 100 10 1000 100 10 1000 107 80 10 800 20 10 200 127 100 98 980 100 98 ...View the full answer

Financial Accounting and Reporting

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