ACCT10002 Introduction to Financial Accounting Topic 6
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ACCT10002 Introduction to Financial Accounting
Topic 6
Tutorial Questions
6.1
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Transactions for January |
Quantity Change |
Actual Unit Cost |
Actual Total Cost |
|
Opening inventory (1 Jan) |
120 |
240 |
28,800 |
|
Purchase |
+100 |
250 |
25,000 |
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Sale |
-110 |
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Purchase |
+ 150 |
260 |
39,000 |
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Sale |
-140 |
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Sale |
-100 |
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Purchase |
+ 160 |
275 |
44,000 |
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Ending inventory (31 Jan) |
Units = 180 |
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Required:
Applying the periodic inventory system calculate the following:
a) Closing inventory applying the weighted average method
b) Cost of Goods sold applying the weighted average method
c) Closing inventory applying the first in, first out method; and
d) Cost of goods sold applying the first in, first out method.
e) Which method (weighted average or FIFO) would provide the higher Gross Profit?
6.2
The following information is provided in relation to the inventory position for Maggies Ltd:
Closing inventory
Sales
Opening inventory
Purchases
Required:
a) Complete the following:
141,256
694,210
154,320
396,145
Sales
Less Cost of Goods sold
Opening inventory
+ Purchases
= Goods available for sale
-Closing inventory
= Cost of Goods Sold
= Gross profit
b) Calculate the Gross Profit Margin (%)
6.3
The following information relates to Sassafras Pty Ltd (“Sassafras”). Sassafras uses the perpetual inventory system to account for its one line of inventory. The following information relates to the three month period ending 31 March 2021.
|
Month |
Date |
Item |
Number of Units |
Price per Unit $ |
|
January |
1 |
Balance |
1,000 |
4.00 |
|
|
6 |
Sales |
800 |
|
|
|
13 |
Purchases |
800 |
4.50 |
|
February |
7 |
Sales |
750 |
|
|
|
14 |
Purchases |
1,200 |
5.00 |
|
March |
8 |
Sales |
1,100 |
|
Required:
(a) Complete the table below by using the perpetual system and the Moving Weighted Average Method.
Sassafras Pty Ltd Inventory Record - Moving Weighted Average Cost Method
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Purchases |
Sales |
Balance |
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Date |
Units |
Price $ |
Total $ |
Units |
Price $ |
Total $ |
Units |
Price $ |
Total $ |
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b) If Sassafras used the periodic inventory system calculate the ending inventory value applying the first on, first out method of valuation.
c) Complete the table below using the perpetual system and the First In, First Out (FIFO) method.
(cont.)
Sassafras Pty Ltd Inventory Record – First In, First Out (FIFO) Method
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Purchases |
Sales |
Balance |
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Date |
Units |
Price $ |
Total $ |
Units |
Price $ |
Total $ |
Units |
Price $ |
Total $ |
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2023-02-13