July 8: issued 6,000 litres July 9: 14,000 litres @ €2.30 per litre July 20: Issued 7,000 litres July 25: 5,000 litres @ €2.35 per litre. You are required to compute the inventory value on July 31, using each of the following methods (20 Marks): (a) First in First out (2 Marks) (b) Last in First out; and (2 Marks) (c) Average cost method (3 Marks)
July 8: issued 6,000 litres July 9: 14,000 litres @ €2.30 per litre July 20: Issued 7,000 litres July 25: 5,000 litres @ €2.35 per litre. You are required to compute the inventory value on July 31, using each of the following methods (20 Marks): (a) First in First out (2 Marks) (b) Last in First out; and (2 Marks) (c) Average cost method (3 Marks)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Thames Cotton Mills Ltd. take a periodic inventory of their stock at the end of each month. The physical inventory taken on 30th June shows a balance of 1,000 litres of chemicals at hand @ €2.28 per litre. [20 marks]
The following transactions took place during July:
July 1: 14,000 litres @ €2.30 per litre
July 7: 10,000 litres @ €2.32 per litre
July 8: issued 6,000 litres
July 9: 14,000 litres @ €2.30 per litre
July 20: Issued 7,000 litres
July 25: 5,000 litres @ €2.35 per litre.
You are required to compute the inventory value on July 31, using each of the following methods (20 Marks):
- (a) First in First out (2 Marks)
- (b) Last in First out; and (2 Marks)
- (c) Average cost method (3 Marks)
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