Accainting for InventoryiBahah Masi mba Ltd are retailers whơ sell tiles. Deuring the month of July to.september Ro19, thet were price plachuahions. Dae to the above proldem HheCompany had to adjust its uelling pricer. The follocwsing tranachions took placeduring the peñed;Suly 8: Opening stock was 5,000 tiler valued at sh 825,000.Jalyto Orders plaed with the Company incrased, so extra tiles had tobe obtainedfromMombaua. There pore 22,000 tiHes werepurcharedat a cost of shil140 each but in addikon there was fright andAll Pinsurance chargei ofshi5per tileJaly 31 During the month 20,00 tiles were old at a price ofsh.220each.tiler waw puchased at a cost q sh. 175 plt:.August were 14,000 tiles at aAugautalnew batchof 14,000the monthAugust a0: The salesforselling price of sh 220 each.September 1: A further 24,000 tiler werepuchared at a cas t of ish.195 each.September 30: A total of or,000 tilas wer vold duing september at prie 4h. 240 each.Requird:a) A stores ledgor accountbA stores ledger acount using Afo method.A stores ledger account uwing LIFO muthod.) Asrertain the gmss poßt a the company por the peniocl alnder fhe abore methods.wing weighted aveegemethod.

Accain bing for lnveatoyi. Bahah Masimba Ltd are retailes whơ sell tiles. Dusing the month of July to. september Ro19, thet were price pluchuahions. Due to the above proldem Hhe Company had to adjust its velling prices. The pollocwsing tranachions took plae derang the peñod; Jaly &: Opening stock was 5,000 tiles valued at sh 825,000. Jalyto Orders placed with the Com pany incrased, so extra tiles had to Mombasa." at a cost of sh.l140 each but in addíkon there was fright and be obtained from Mombaua Therpore 22,000 tilter were purchared AltP insurance charges of chis. per tile Jaly 31 During the month 20,000 tiles were sold at a price of sh.220 each. puchased af a cost q sh. 195 plt. the month of Aygust were 14000 tiles at a Auguatte A nes batch of It, 000 bile wau August a0: The sales to selling price of sh 230 each. September 1: A fucther 24,000 tiler were purchased at a cas t of sh.195 each. September 30: h totel of om,000 tilas aver uold duwing septemberat price 4 for sh 240 each. Riquired: a)A stores ledgor account b) A stores ledger acount using Afo method. A stors ledger acount using LIFO method. ) Astertain the gmer poßt a the tompany pr the periodl ainder the abore methods. wing waghted averege method. कीचमण य्यपचिका ठिका

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter5: Inventories And Cost Of Goods Sold

Section: Chapter Questions

Problem 5.10AMCP

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Accainting for Inventoryi
Bahah Masi mba Ltd are retailers whơ sell tiles. Deuring the month of July to.
september Ro19, thet were price plachuahions. Dae to the above proldem Hhe
Company had to adjust its uelling pricer. The follocwsing tranachions took place
during the peñed;
Suly 8: Opening stock was 5,000 tiler valued at sh 825,000.
Jalyto Orders plaed with the Company incrased, so extra tiles had to
be obtained
from
Mombaua. There pore 22,000 tiHes were
purchared
at a cost of shil140 each but in addikon there was fright and
All P
insurance chargei of
shi5
per tile
Jaly 31 During the month 20,00 tiles were old at a price of
sh.220each.
tiler waw puchased at a cost q sh. 175 plt:.
August were 14,000 tiles at a
Augautal
new batch
of 14,000
the month
August a0: The sales
for
selling price of sh 220 each.
September 1: A further 24,000 tiler were
puchared at a cas t of ish.195 each.
September 30: A total of or,000 tilas wer vold duing september at prie 4
h. 240 each.
Requird:
a) A stores ledgor account
bA stores ledger acount using Afo method.
A stores ledger account uwing LIFO muthod.
) Asrertain the gmss poßt a the company por the peniocl alnder fhe abore methods.
wing weighted aveege
method.

Expert Solution

Step 1

Perpetual inventory system: Under this inventory system, the records of inventory are continuously updated by the organization by recording every transaction of purchase or sale or issue to production.

First-in first out method (FIFO): The FIFO method under the perpetual inventory system values the cost of units sold at the rate of units which were first purchased in the inventory. Thus, the cost of goods sold is valued at cost of earlier purchased goods and the ending inventory is valued at the cost of recently purchased goods.

Last in first out method (LIFO): The LIFO method under the perpetual inventory system values the cost of units sold at the rate of units which were recently purchased. Thus, the ending inventory is valued at the cost of earlier purchased goods.

Weighted average cost method: The weighted average method under the perpetual inventory system values the cost of goods sold and also the ending inventory at the rate which is calculated by dividing the cost of units available for sale by the units available.

Step 2

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Prepare a stores ledger account using weighted average method:

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