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Champakali Spirit Oil Limited is a bulk distributor of kerosene. For the month of July 2010, his transactions were as

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Champakali Spirit Oil Limited is a bulk distributor of kerosene. For the month of July 2010, his transactions were as follows:

The CEO of the firm, Chetan Jain had no idea about the valuation of the stock and its impact on the profitability of the business so he asks his friends to help him out. Jamvanth is of the opinion that he should use LIFO method of valuation. Anirudh suggests FIFO method of valuation while Mahendra has a totally different opinion and favors weighted average method. Advise Chetan by showing the impact of the various methods on the profit position.

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Date 1-Jul 3-Jul 15-Jul 20-Jul 28-Jul Position Opening Stock Purchases Purchases Purchases Sales Liters 1,00,000 5,00,000 1,00,000 50,000 Amount /Liter 5 4 4.5 6 *25,00,000

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Given Information Opening Stock on 1 Jul 5 liters at 4 USD liter Purchases on 3 Jul 4 5 liters at 4 USD liter Purchases on 15 Jul 50 000 liters at 6 U…View the full answer


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Financial Accounting For Management

Financial Accounting For Management

ISBN: 9789385965661

4th Edition

Authors: Neelakantan Ramachandran, Ram Kumar Kakani

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Question Details
Chapter # 8- Accounting Issues for Larger Entities
Section: Review Questions
Problem: 3
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Question Posted: August 26, 2023 04:14:40
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