During the audit of Financial Year ended at 30-06-2021, an accounting record of a manufacturing company, XYZ (Pvt.) Ltd. revealed that the company purchased following stocks during the said financial year: Date of Units Rate Sr. # Purchase 1 10-08-2020 1,800 150 2 22-08-2020 1,600 160 15-09-2020 1,000 180 4 19-09-2020 2,900 160 5 05-10-2020 1,500 170 6. 17-11-2020 800 180 7 28-11-2020 1,000 160 15-12-2020 2,700 150 9. 05-01-2021 600 170 10 22-01-2021 1,500 190 11 20-02-2021 1,000 200 12 10-03-2021 500 210 13 31-03-2021 1,800 190 14 12-04-2021 2,000 180 15 30-04-2021 700 200 16 20-05-2021 1,200 210 17 01-06-2021 900 200 18 20-06-2021 1,000 210 9,000 units were in closing stock at 30-06-2021. The company was using FIFO method as a company policy to calculate the cost of stock in trade and according to that, calculated its cost of 9,000 closing units as Rs. 1,583,265 Required: You have to detect and simultaneouly correct the error in above calculation. And find out the exact cost of 9,000 units by using FIFO method.

During the audit of Financial Year ended at 30-06-2021, an accounting record of a manufacturing company, XYZ (Pvt.) Ltd. revealed that the company purchased following stocks during the said financial year: Date of Units Rate Sr. # Purchase 1 10-08-2020 1,800 150 2 22-08-2020 1,600 160 15-09-2020 1,000 180 4 19-09-2020 2,900 160 5 05-10-2020 1,500 170 6. 17-11-2020 800 180 7 28-11-2020 1,000 160 15-12-2020 2,700 150 9. 05-01-2021 600 170 10 22-01-2021 1,500 190 11 20-02-2021 1,000 200 12 10-03-2021 500 210 13 31-03-2021 1,800 190 14 12-04-2021 2,000 180 15 30-04-2021 700 200 16 20-05-2021 1,200 210 17 01-06-2021 900 200 18 20-06-2021 1,000 210 9,000 units were in closing stock at 30-06-2021. The company was using FIFO method as a company policy to calculate the cost of stock in trade and according to that, calculated its cost of 9,000 closing units as Rs. 1,583,265 Required: You have to detect and simultaneouly correct the error in above calculation. And find out the exact cost of 9,000 units by using FIFO method.

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter4: Professional Legal Liability

Section: Chapter Questions

Problem 21RQSC

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