Spiritual Intercessors Ministry $($SIM$)$ Ltd sells A$4$ sheets which are received from the wholesaler at different prices. The company issues the A$4$ sheets directly from stores to customers. The following are the details of A$4$ sheets received and issued to customers during the month of December, $2018.$

Date $(2018)$ Receipts Issues

Dec. $1200$ boxes at GHS $10$ each

Dec. $3100$ boxes at GHS $10\mathrm{.}5$ each

Dec. $6150$ boxes at GHS $12$ each

Dec. $1050$ boxes at GHS $11$ each

Dec. $1560$ boxes at GHS $13$ each

Dec. $17120$ boxes at GHS $11\mathrm{.}5$ each

Dec. $2080$ boxes at GHS $12$ each

Dec. $21280$ boxes at GHS $15$ each

Stock was taken on $22$nd December, $2018.$

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Required:

a$)$ Write up the store ledgers, and prepare a statement of gross profit under the following pricing methods:

i$)$ First in$,$ First Out $($FIFO$)$

ii$)$ Last in$,$ First Out $($LIFO$)$

b$)$ With the statements prepared in $($a$)$ above, outline two advantages and disadvantages each for valuing stock using the LIFO and the FIFO approaches.

Answer rating: 100% (QA)

To address this problem well first construct the store ledger for the A4 sheets for December 2018 based on the FIFO First in First Out and LIFO Last i... View the full answer