You work for a company called "Fashion Emporium", a retail business that specializes in selling clothing. The company's financial year-end is 30 June 2023.

On 01 January 2023, Fashion Emporium had 1 000 units of jeans in inventory at a cost of R100 per unit. During the month of January 2023, the company purchased an additional 2 000 units of jeans at a cost of R110 per unit. The company sold 2 500 units of jeans on credit during January 2023 for R150 per unit.

Fashion Emporium offers a trade discount of 10% on all sales to customers who purchases more than 10 units of jeans. In addition, the company offers a settlement discount of 2% to customers who pay their bills within 15 days of the invoice date.

Additional information:
Assume that all transactions are on credit and that Fashion Emporium uses a perpetual inventory system. Assume all jeans are homogeneous. Ignore VAT for this question. Round off to the nearest Rand where applicable.

REQUIRED:
2.1 Calculate the cost of goods sold for January 2023 using the weighted average method.

2.2 Calculate the trade discount allowed for sales of jeans in January 2023, assuming that all sales transactions were sold in batches of 10 items and more per sale transaction.

2.3 Assume that all sales were paid within 15 days. Calculate the settlement discount allowed for sales of jeans in January 2023.

Answer rating: 100% (QA)

Sure lets calculate the requested values step by step 21 Calculate the cost of goods sold for Januar... View the full answer