At beginning of July 2021, Idah & Faith (IF) Co had 25 microwave ovens in inventory...

 

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At beginning of July 2021, Idah & Faith (IF) Co had 25 microwave ovens in inventory costing of K750 per unit. Over the next three months, the company made the following purchases. Unit cost Date 6 July 5 August 1 September 14 September Quantity 5 4 8 6 770 800 850 880 K During that period, there were sales of 35 units, generating a total sales revenue of K38,500. REQUIRED: a) Prepare the stores ledger card for the materials in stock that records all material movements using: (i) FIFO method [5 marks] [5 marks] (ii) LIFO method b) Based on the work done in (a) above, determine the cost of sales and profit for three months to 30 September using FIFO and also based on LIFO. [5marks] c) Compare the reported profit of the company in (b) above over the three months to 30 September based on the two methods (FIFO and LIFO) and comment on the results. [5 marks] At beginning of July 2021, Idah & Faith (IF) Co had 25 microwave ovens in inventory costing of K750 per unit. Over the next three months, the company made the following purchases. Unit cost Date 6 July 5 August 1 September 14 September Quantity 5 4 8 6 770 800 850 880 K During that period, there were sales of 35 units, generating a total sales revenue of K38,500. REQUIRED: a) Prepare the stores ledger card for the materials in stock that records all material movements using: (i) FIFO method [5 marks] [5 marks] (ii) LIFO method b) Based on the work done in (a) above, determine the cost of sales and profit for three months to 30 September using FIFO and also based on LIFO. [5marks] c) Compare the reported profit of the company in (b) above over the three months to 30 September based on the two methods (FIFO and LIFO) and comment on the results. [5 marks]

Answer rating: 100% (QA)

a Stores Ledger Card FIFO Method Date Description Quantity In Quantity Out Unit Cost K Total Cost K ... View the full answer