Q4. Strings for You commences business on 1 January buying and selling musical instruments. It sells two standard types, violas and cellos, and the transactions for the year are as set out in the table below. All price are in £. 1 January 31 March 30 April 30 June 31 July 30 September Violas Buy 2 at 400 1 at 350 2 at 300 Sell 1 at 600 1 at 600 3 at 500 Cellos Buy 2 at 600 1 at 700 1 at 800 Sell 1 at 1,000 2 at 1,100 You are aware that the cost to Strings for You of the instruments is changed on 1 April, 1 July and 1 October, but will not change again until 1 January following. a) Prepare a statement showing gross profit and closing inventory valuation, separately for each type of instrument, under each of the following assumptions. ( FIFO

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Q4. Strings for You commences business on 1 January buying and selling musical instruments. It sells
two standard types, violas and cellos, and the transactions for the year are as set out in the table
below. All price are in £.
1 January
31 March
30 April
30 June
31 July
30 September
Violas
Buy
2 at 400
1 at 350
2 at 300
Sell
1 at 600
1 at 600
3 at 500
Cellos
Buy
2 at 600
1 at 700
1 at 800
Sell
1 at 1,000
2 at 1,100
You are aware that the cost to Strings for You of the instruments is changed on 1 April, 1 July and 1
October, but will not change again until 1 January following.
a) Prepare a statement showing gross profit and closing inventory valuation, separately for
each type of instrument, under each of the following assumptions.
(i) FIFO;
(ii) LIFO;
Transcribed Image Text:Q4. Strings for You commences business on 1 January buying and selling musical instruments. It sells two standard types, violas and cellos, and the transactions for the year are as set out in the table below. All price are in £. 1 January 31 March 30 April 30 June 31 July 30 September Violas Buy 2 at 400 1 at 350 2 at 300 Sell 1 at 600 1 at 600 3 at 500 Cellos Buy 2 at 600 1 at 700 1 at 800 Sell 1 at 1,000 2 at 1,100 You are aware that the cost to Strings for You of the instruments is changed on 1 April, 1 July and 1 October, but will not change again until 1 January following. a) Prepare a statement showing gross profit and closing inventory valuation, separately for each type of instrument, under each of the following assumptions. (i) FIFO; (ii) LIFO;
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