Question

i want the answer and explain of required :

b) Prepare journal records by using Periodic Inventory System. Calculate Cost of Raw Materials used and Ending Inventory of Raw Materials and compare the results. Explain, why raw materials costs are same or different.

2. Inventory transactions of a company for October 2014 period are given below: 01.10.2014 beginning inventory 100 units (unit cost 40 TL). 03.10.2014 purchased 500 units, 50 TL per unit. 05.10.2014 used 400 units for production. 12.10.2014 purchased 500 units, 54 TL per unit. 18.10.2014 purchased 600 units, 55 TL per unit. 22.10.2014 used 1,000 units for production. Required: a) Record inventory transactions to Materials Requisition Card card by using First In First Out (FIFO) or Weighted Average Method. b) Prepare journal records by using Periodic Inventory System. Calculate Cost of Raw Materials used and Ending Inventory of Raw Materials and compare the results. Explain, why raw materials costs are same or different. (25 puan) Date RECEIPTS Quantity Unit Cost ISSUES Amount Quantity Unit Amount BALANCE Quantity Unit Cost Cost Materials Requisition Card

Answer 1

Styles Paragraph Styles 314151617181.9 110 111 121 .14 115 116 117 118 119 120 121 122 123 124. FIFO Method Date Particulars Receipts Unit Cost Issues Qty. Unit Cost Amount 1-10-2014 3-10-2014 40 Qty. 100 500 Beginning Purchase Amount 4.000 25,000 Balance Unit Cost 40 40 50 Qty. 100 100 500 Amount 4,000 4,000 25,000 50 5-10-2014 Issued 100 40 50 4,000 15.000 300 1 12-10-2014 Purchase 500 27.000 200 1 500 200 18-10-2014 Purchase 600 55 33,000 10,000 10.000 27,000 10,000 27,000 33,000 600 22-10-2014 Issued 100 5 0 54 5.000 27,000 22,000 78,000 300 55 400 1,400 Total 1,700 89,000 300 16,500 11,000 (As per FIFO method inventory value for 300 units @ 55TL Total cost 16,500) English India

Weighted average Method Date Particulars Issues Qty. Unit Cost Receipts Unit Cost 40 50 Amount 4,000 25,000 500 1-10-2014 3-10-2014 5-10-2014 12-10-2014 18-10-2014 22-10-2014 48.33 11 Balance Qty. Unit Cost Amount 100 404,000 600 48.3329,000 9,667 700 52.38 36,667 1300 53.59 69,667 300 53.59 16,077 Beginning Purchase Issued Purchase Purchase Issued 400 200 50054 600 27,000 33,000 1000 53.59 1 53,590 Total 1700 89,000. 1140 72,923 300 53.59 16,077 (As per FIFO method inventory value for 300 units @ 53.59 TL Totalleost 16,077) As per above calculation we can see answer is different method as FIFO method and Weighted Average method because of as per FIFO method inventory to issued from first purchase with actual price whereas per weighted average method material issued to production at Average cost of goods avilabale.