From the following data, Prepare the store ledger account as per the Perpetual Inventory System and
calculate the value of closing inventory on March 31, 2020 using:
(i)First-in-First-out Method (FIFO) (3 Marks)
(ii) Last-in-First-Out Method (LIFO); (3 Marks)
(iii) Weighted Average Cost Method. (3 Marks)
March 1 Opening Stock 450 Units @ Rs. 7.50 Each.
Purchase March 5 650 Units @ Rs. 8.00 Each.
Purchase March 15 550 Units @ Rs. 9.00 Each.
Purchase March 21 400 Units @ Rs. 8.50 Each.
Issues March 3 310 Units.
Issues March 10 510 Units.
Issues March 17 410 Units.
Answers
Answer:-All the parameters are found out the table is constructed easily
Explanation:
From the following data, Prepare the store ledger account as per the Perpetual Inventory System and
calculate the value of closing inventory on March 31, 2020 using:
(i)First-in-First-out Method (FIFO) (3 Marks)
(ii) Last-in-First-Out Method (LIFO); (3 Marks)
(iii) Weighted Average Cost Method. (3 Marks)
March 1 Opening Stock 450 Units @ Rs. 7.50 Each.
Purchase March 5 650 Units @ Rs. 8.00 Each.
Purchase March 15 550 Units @ Rs. 9.00 Each.
Purchase March 21 400 Units @ Rs. 8.50 Each.
Issues March 3 310 Units.
Issues March 10 510 Units.
Issues March 17 410 Units.:-
The question asks for the net amount that the store ledger gets in his account:-
Perpetual Inventory system:-
Perpetual inventory is an accounting method that continuously records inventory changes in real time with computerized point-of-sale systems, removing the need for physical inventory checks. It provides a highly detailed view of changes in inventory with immediate reporting of the amount of inventory in stock, and accurately reflects the level of goods on hand.
Within this system, a company makes no effort at keeping detailed inventory records of products on hand; rather, purchases of goods are recorded as a debit to the inventory database. Effectively, the cost of goods sold includes such elements as direct labor and materials costs and direct factory overhead costs.
A perpetual inventory system is distinguished from a periodic inventory system, a method in which a company maintains records of its inventory by regularly scheduled physical counts.:-
So using all the data we get the table.
Answer:-All the parameters are found out the table is constructed easily.
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Stock of 250 units will be valued @ Rs.7180 as per FIFO method, @ Rs.6830 as per LIFO method and @ Rs.7011 as per WAM.
Given:
Opening balance 450 units @ 7.50 per unit
3/3 Issued 310 units
5/3 Purchased 650 units @ 8 per unit
10/3 Issued 510 units
15/3 Purchased 550 units @ 9 per unit
17/3 Issued 410 units.
21/3 Purchased 400 units @ 8.50 per unit
To prepare:
Stores ledger account
Solution:
Stores ledger account as per FIFO
Date Receipts Issues Balance
Qty Rate Amount. Qty Rate Amount Qty Rate Amount
1/3 450 7.50 3750
3/3 310 7. 50 2325 140 7.50 1050
5/3 650 8 5200 140 7.50 1050
650 8 5200
10/3 140 7.50 1050
370 8 2960 280 8 2240
15/3 550 9 4950 280 8 2240
550 9 4950
17/3 280 8 2240
130 9 1170 420 9 3780
21/3 400 8.50 3400 420 9 3780
400 8.50 3400
Stores ledger account as per LIFO
Date Receipts Issues Balance
Qty Rate Amount. Qty Rate Amount Qty Rate Amount
1/3 450 7.50 3750
3/3 310 7. 50 2325 140 7.50 1050
5/3 650 8 5200 140 7.50 1050
650 8 5200
10/3 510 8 4080 140 7.50 1050
140 8 1120
15/3 550 9 4950 140 7.50 1050
140 8 1120
550 9 4950
17/3 410 9 3690 140 7.50 1050
140 8 1120
140 9 1260
21/3 400 8.50 3400 140 7.50 1050
140 8 1120
140 9 1260
400 8.50 3400
Stores ledger account as per WAM
Date Receipts Issues Balance
Qty Rate Amount. Qty Rate Amount Qty Rate Amount
1/3 450 7.50 3750
3/3 310 7. 50 2325 140 10.18 1425
5/3 650 8 5200 790 8.38 6625
10/3 510 8.38 4274 280 8.40 2351
15/3 550 9 4950 830 8.80 7301
17/3 410 8.80 3690 420 8.60 3611
21/3 400 8.50 3400 820 7.50 7011
Therefore, closing stock of 820 units will be valued @ Rs.7180 as per FIFO method, @ Rs.6830 as per LIFO method and @ Rs.7011 as per WAM.
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