Question

ACCHE GROUP EXERCISE 2 (Wednesday, 20 November 2019) Pineapple Sdn Bhd pul ver purcha s es is types of computer Components. The companys im. Below is mary of the beginning inventory December 2015 Quantity L CRM CRM 100 units 6 Purchase 1 Sale 21Purch 24 Sale 27 Purchase 30 Sale 90 units 30 units The operating expenses for December was RM1,900. Required: . Calculate the ending inventory and cost of goods sold using First-in, First-out (FIFO) and Weighted average cost (WAC). b. Prepare the statement of profit or loss showing profit for the year for both FIFO and WAC cost flow methods. . Which inventory method will you use if your motive is to report inventory on the statement of financial position at the most recent cost? d. If all of the units in the ending inventory calculated in (a) above could only be sold at market value of RM6 per unit, what would be the ending inventory? Record the adjusting journal entry using FIFO cost-flow method.

Answer 1

Ans . Pineapple Sdn. Bhd Calculation of Inventory (FIFO Method) Purchase customer cost Date Qty intolaty II Torolo Chiton Total Qty hiyo Sales Unit Totale costerost 160 Balance Unctions Total coull 8 800 Deel - Dec, 6 60 9 - 540 8 800 800 + 100 8 60 540 Dee, 13 - 70S 00 240 60 9 Dee, 21 150 Dee, 24 560|| 30 - 540 g 1 1,350 - 1308 240 609 1540 Jiso 91 1,350 308 240 9 $yo 11209 1980 1.30 9 270 10. 900 1309 T 270 190 10 .900 309 270 90 10 900 Dee, 27 90 Dee, 30 Tory 300 2,790 310 2,690 Ending Inventory 100, 2 .90 units @ RM 10 each RM 900 vic Cost of goods sold - opening Inventory & Punchoses - closing Inventory F = RM 800 + RM 2,790 - RM 900. = RM 2,690 T

calculatione ok. To ventony (Weighted Avg Cost Ion Purchases Il Sales Jo Balance Qty unitat totalist Qty thi Totoy atyr un total Date (Unit (RM) (RM) Unit (RM) (RM) Units (RM) (Rm - Dee, 1 100 8 800 -Dec, 6 60 9 540 10 -12 160 8.375 1340 Degul - 70 8.375 586 90 8:375 754 Dec, 2150 9 1350 - - - 240/8761 2, 104 Dec2y - - 2108 767 1,841 308 767 263 Decat go 10 9001 - 1209 692 1, 163 Dec 30 - - :- 30 9.692 29190 9.692 872 Total 300 2 790 310 2,718 Ending Inventory = ow go in its @ RM 9.692 t cach i RM8 72 Cost of goods sold of exol) tosteron Opening Inventory # + Purchases - Closing Inventory - RM 800 + RM 2,790 - 2 RM 872 itongo & RM 2,718

Calculation 06 Aug cost perz unel Decro, 2018(400x8 Dos (100 x 8) + (60XV, 1340-8:35 100 + 60 160 Dec 21, 2018 RW (90x8.375) + (150x9] . 2104 - 8.17 90+ 150 240 Dec 27, 2018 ] DI (30x8.767)+(90x10 - 1163, 9.692 I 30 +90 ) Statement of Profit or loss FIFO (RM) WAC (RM) s Particularis spor 4 Sales (70x RM 20)+(210x22)+(30x.27 6770 6,770 Cost of goods sold Operating expenses Profit 2,690 1,900 2,180 2,718 : 1900 2,152 (c) If the motive is to report inventory on the statement of financial position at the most recent cast, then first in Finst- out (FIFO method will be used.

d_ closing Inventory cost per unit Market Price per unit FIFO go units RM 10 RM6 WAL gounits. RM 9. 692 RMG. The Price lower closing inventory is valued at cost or market price which ever is. - In this case - Cost Price undon is higher than market price. Hence closing a inventory will be valued at market price le RMG per unit. Therefore value of closing Inventory = go units x RM 6 =Ry540 Adjusting Journal Entry cering FIFO method Closing stock Alc- - - Dr RM 540 To Trading All (Being adjustment entry for insond goods of) RMsyo