A business commenced on 1 January and purchased the following units of inventory: Unit price (£) 2.00 Value No of units 380 January February March 760 1000 400 2.50 2.50 350 875 April May June 420 2.75 3.00 1155 430 1290 440 3.25 1430 6510 Total 2420 In June 1,420 units were sold for £7,000. The business uses the FIFO method to value its inventory (i) How many units are left in inventory? (ii) What is the cost of closing inventory for the period? (iii) What is the gross profit for the period?
A business commenced on 1 January and purchased the following units of inventory: Unit price (£) 2.00 Value No of units 380 January February March 760 1000 400 2.50 2.50 350 875 April May June 420 2.75 3.00 1155 430 1290 440 3.25 1430 6510 Total 2420 In June 1,420 units were sold for £7,000. The business uses the FIFO method to value its inventory (i) How many units are left in inventory? (ii) What is the cost of closing inventory for the period? (iii) What is the gross profit for the period?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
(i) How many units are left in inventory?
(ii) What is the cost of closing inventory for the period?
(iii)What is the gross profit for the period?
(iv)What would be the impact on gross profit on discovering that inventory costing £100 with a
net realisable value of £120 had been omitted from the original
I. An increase of £100
II. An increase of £120
III. A decrease of £20
IV. No effect at all
Transcribed Image Text:A business commenced on 1 January and purchased the following units of inventory:
Unit price
(£)
2.00
No of
Value
units
760
January
February
March
380
400
2.50
1000
350
2.50
875
1155
April
May
June
420
2.75
430
3.00
1290
1430
440
3.25
Total
2420
6510
In June 1,420 units were sold for £7,000. The business uses the FIFO method to value its
inventory
(1) How many units are left in inventory?
(ii) What is the cost of closing inventory for the period?
(ii) What is the gross profit for the period?
(iv)What would be the impact on gross profit on discovering that inventory costing £100 with a
net realisable value of £120 had been omitted from the original inventory valuation?
1. An increase of £100
II.
III.
An increase of £120
A decrease of £20
IV.
No effect at all
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