Required:

 Use the above data and calculate Value of stock using FIFO and AVCO methods of inventory valuation and evaluate difference between value of stock in both the methods.

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Powertech Ltd is a manufacturing company founded by Mr. Rashid four years ago, who is engineer by profession. The company manufactures power generation units. The demand for the product has increased in the last 2 years. The company has hired new staff in production and administration due to the increase in demand. Mr. Rashid has approached a leading bank to provide additional finance for the expansion of the company. The bank is willing to grant the finance provided Company hire a full-time management accountant as accounting control system is not very systematic in the company due to Mr. Rashid's Engineering background. He focusses more on the technical aspect of the business and as a result ignores the accounting part Mr. Salim has been hired as a Management accountant of Powertech Ltd. Recently. By looking at the accounts Mr. Salim realized that the company's main component is material and Inventory control system is lacking in the past and there is no record of Inventory documentation to identify quantities of inventory. Mr. Rashid explained that they do inventory control only once a year when the auditor comes, and he has no idea of inventory control. You have contacted the person who is responsible for purchasing and issuing material for production, Mr. Salim has realized that one item (50KW Motor) which has a high value. He decided to implement control on this item first The following details are available regarding the 50 KV Motor for the month of February Date 2nd February 9 February 11th February 16 February 18h February 21 February Receipt/ Issue Receipt Receipt Issue Receipt Issue Receipt 23 February Issue (Units) Choose between (60 to 75) 80 Choose between (110 to 125) 75 90 40 50 Price per unit (OMR) 100 120 135 145 Powertech Ltd. is a manufacturing company founded by Mr. Rashid four years ago, who is engineer by profession. The company manufactures power generation units. The demand for the product has increased in the last 2 years. The company has hired new staff in production and administration due to the increase in demand. Mr. Rashid has approached a leading bank to provide additional finance for the expansion of the company. The bank is willing to grant the finance provided Company hire a full-time management accountant as accounting control system is not very systematic in the company due to Mr. Rashid's Engineering background. He focusses more on the technical aspect of the business and as a result ignores the accounting part Mr. Salim has been hired as a Management accountant of Powertech Ltd. Recently. By looking at the accounts Mr. Salim realized that the company's main component is material and Inventory control system is lacking in the past and there is no record of Inventory documentation to identify quantities of inventory. Mr. Rashid explained that they do inventory control only once a year when the auditor comes, and he has no idea of inventory control. You have contacted the person who is responsible for purchasing and issuing material for production, Mr. Salim has realized that one item (50KW Motor) which has a high value. He decided to implement control on this item first The following details are available regarding the 50 KV Motor for the month of February Date 2 February g February 11th February 16 February 18th February 21 February Receipt/ Issue Receipt Receipt Issue Receipt Issue Receipt 23 February Issue (Units) Choose between (60 to 75) 80 Choose between (110 to 125) 75 90 40 50 Price per unit (OMR) 100 120 135 145 Powertech Ltd is a manufacturing company founded by Mr. Rashid four years ago, who is engineer by profession. The company manufactures power generation units. The demand for the product has increased in the last 2 years. The company has hired new staff in production and administration due to the increase in demand. Mr. Rashid has approached a leading bank to provide additional finance for the expansion of the company. The bank is willing to grant the finance provided Company hire a full-time management accountant as accounting control system is not very systematic in the company due to Mr. Rashid's Engineering background. He focusses more on the technical aspect of the business and as a result ignores the accounting part Mr. Salim has been hired as a Management accountant of Powertech Ltd. Recently. By looking at the accounts Mr. Salim realized that the company's main component is material and Inventory control system is lacking in the past and there is no record of Inventory documentation to identify quantities of inventory. Mr. Rashid explained that they do inventory control only once a year when the auditor comes, and he has no idea of inventory control. You have contacted the person who is responsible for purchasing and issuing material for production, Mr. Salim has realized that one item (50KW Motor) which has a high value. He decided to implement control on this item first The following details are available regarding the 50 KV Motor for the month of February Date 2nd February 9 February 11th February 16 February 18h February 21 February Receipt/ Issue Receipt Receipt Issue Receipt Issue Receipt 23 February Issue (Units) Choose between (60 to 75) 80 Choose between (110 to 125) 75 90 40 50 Price per unit (OMR) 100 120 135 145 Powertech Ltd. is a manufacturing company founded by Mr. Rashid four years ago, who is engineer by profession. The company manufactures power generation units. The demand for the product has increased in the last 2 years. The company has hired new staff in production and administration due to the increase in demand. Mr. Rashid has approached a leading bank to provide additional finance for the expansion of the company. The bank is willing to grant the finance provided Company hire a full-time management accountant as accounting control system is not very systematic in the company due to Mr. Rashid's Engineering background. He focusses more on the technical aspect of the business and as a result ignores the accounting part Mr. Salim has been hired as a Management accountant of Powertech Ltd. Recently. By looking at the accounts Mr. Salim realized that the company's main component is material and Inventory control system is lacking in the past and there is no record of Inventory documentation to identify quantities of inventory. Mr. Rashid explained that they do inventory control only once a year when the auditor comes, and he has no idea of inventory control. You have contacted the person who is responsible for purchasing and issuing material for production, Mr. Salim has realized that one item (50KW Motor) which has a high value. He decided to implement control on this item first The following details are available regarding the 50 KV Motor for the month of February Date 2 February g February 11th February 16 February 18th February 21 February Receipt/ Issue Receipt Receipt Issue Receipt Issue Receipt 23 February Issue (Units) Choose between (60 to 75) 80 Choose between (110 to 125) 75 90 40 50 Price per unit (OMR) 100 120 135 145

Answer rating: 100% (QA)

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