Unicombs deal in personal computers of a standard make and model. During the year ended 31.12.2011 they
Question:
Unicombs deal in personal computers of a standard make and model. During the year ended 31.12.2011 they made their purchases at different prices; but they retailed them consistently at £1,200 per unit until 1.10.2011 when they increased the sale price by 10%. An inventory of 320 units was reported in their Statement of financial position on 31.12.2010 at £128,000. Particulars of their purchases and sales in the year ended 31 December 2011 are as follows:
Required:
(a) Determine the cost of inventory held on 31.12.2011 on each of the following alternative cost-flow assumptions: (i) FIFO, (ii) LIFO, (iii) simple average cost, (iv) weighted average cost.
(b) Trace the effect of each of the above cost-flow assumptions on the company’s performance and position.
Step by Step Answer:
a Calculate the cost of inventory held on 31122011 for each costflow assumption i FIFO FirstIn FirstOut Under FIFO you assume that the first units purchased are the first ones sold Calculate COGS for ...View the full answer
Financial Accounting An Introduction
ISBN: 9780273737650
2nd Edition
Authors: Mr Barry Elliott, Mr Augustine Benedict
