Comvita follows the period inventory accounting. During the reporting period ended 31st December 2018, Comvita have sold 250, 000 units of Manuka honey with a sales price of $100. answer these two following question seperately: question no 1 Analyse how inventory valuation methods impact on financial statement analysis of Comvita. The Comvita management has asked you to recommend from three inventory valuation methodse. FIFO, LIFO and weighted average for their cost of goods sold. The management have provided you with the following data (LO2) Inventory at 1 Jan 2018 is 90,000 units @ $ 50 Inventory at 30 March 2018 is 110,000 units @ 52 Inventory at 1st July 2018 is 55,000 units @ 60 Inventory at 1st October is 65,000 @ 70 Note: Your recommendation should be supported with the evaluation of cost of goods sold calculation for each inventory methods . (LO2: Apply accounting tools and techniques to analyse and resolve complex situations within an organisation ) question no 2 Prepare the profit and loss statement based on above-provided accounting data to inform management about the likely impact of each inventory valuation method on developing and maintaining strategic business relationships with internal and external stakeholders. ?(LO6) ( Apply accounting tools and techniques for decision making to develop and maintain strategic business relationships with internal and external stakeholders.)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 50E: Inventory Costing Methods Crandall Distributors uses a perpetual inventory system and has the...

See similar textbooks

Related questions

Concept explainers

Topic Video

Question

Comvita follows the period inventory accounting. During the reporting period ended 31^st December 2018, Comvita have sold 250, 000 units of Manuka honey with a sales price of $100.

answer these two following question seperately:

question no 1

Analyse how inventory valuation methods impact on financial statement analysis of Comvita. The Comvita management has asked you to recommend from three inventory valuation methodse. FIFO, LIFO and weighted average for their cost of goods sold. The management have provided you with the following data (LO2)

Inventory at 1 Jan 2018 is 90,000 units @ $ 50
Inventory at 30 March 2018 is 110,000 units @ 52
Inventory at 1^st July 2018 is 55,000 units @ 60
Inventory at 1^st October is 65,000 @ 70

Note: Your recommendation should be supported with the evaluation of cost of goods sold calculation for each inventory methods .

(LO2: Apply accounting tools and techniques to analyse and resolve complex situations within an organisation )

question no 2

Prepare the profit and loss statement based on above-provided accounting data to inform management about the likely impact of each inventory valuation method on developing and maintaining strategic business relationships with internal and external stakeholders. ?(LO6) ( Apply accounting tools and techniques for decision making to develop and maintain strategic business relationships with internal and external stakeholders.)

Expert Solution

Step by step

Solved in 5 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions