The financial year of Clifford Ltd (Clifford) ends at 31 December. (A) The company has the...
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The financial year of Clifford Ltd ("Clifford") ends at 31 December. (A) The company has the following items of inventories at 31 December 2018: Work-in-progress Product Cost to date Cost to completion Selling and transport costs Estimate selling price: As raw materials As work in progress As finished goods AS55 $ 15 Raw material B 37 3 13 48 22 41 w 14 C $ 34 10 3 39 62 48 D $1= R1.90 $1= R1.85 52 21 3 12 80 E $ 25 22 3 5 55 Further information: 1. Selling and transport costs will be incurred for the sales of raw materials, work in progress and finished goods. 2. Cost to completion are the additional costs required to convert the raw materials or work in progress to finished goods. Required: Determine the inventory value of each of the products for inclusion in the financial statements of Clifford at 31 December 2018. (10 marks) (B) The company bought some materials from a foreign supplier on 30 September 2018. The invoice value was R40,000 and was due for settlement in two equal payments on 30 November 2018 and 31 January 2019. The exchange rate moved as follows: 30 September 2018 $1= R1.60 $1 = R1.80 30 November 2018 31 December 2018 31 January 2019 Required: Prepare the journal entries in the books of Clifford in relation to the above transaction. (10 marks) (Total 20 marks) The financial year of Clifford Ltd ("Clifford") ends at 31 December. (A) The company has the following items of inventories at 31 December 2018: Work-in-progress Product Cost to date Cost to completion Selling and transport costs Estimate selling price: As raw materials As work in progress As finished goods AS55 $ 15 Raw material B 37 3 13 48 22 41 w 14 C $ 34 10 3 39 62 48 D $1= R1.90 $1= R1.85 52 21 3 12 80 E $ 25 22 3 5 55 Further information: 1. Selling and transport costs will be incurred for the sales of raw materials, work in progress and finished goods. 2. Cost to completion are the additional costs required to convert the raw materials or work in progress to finished goods. Required: Determine the inventory value of each of the products for inclusion in the financial statements of Clifford at 31 December 2018. (10 marks) (B) The company bought some materials from a foreign supplier on 30 September 2018. The invoice value was R40,000 and was due for settlement in two equal payments on 30 November 2018 and 31 January 2019. The exchange rate moved as follows: 30 September 2018 $1= R1.60 $1 = R1.80 30 November 2018 31 December 2018 31 January 2019 Required: Prepare the journal entries in the books of Clifford in relation to the above transaction. (10 marks) (Total 20 marks)
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Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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