QUIZ - AA015 TOPIC 8 Part 2 - ACCOUNTING FOR INVENTORIES

QUIZ – AA015 TOPIC 8 Part 2

ACCOUNTING FOR INVENTORIES

Question 1

Syarikat Noah has prepared an inventory record for the month of January 2023 as follows:

Date	Explanation	Units	Unit Cost (RM)	Total cost (RM)
Jan 1	Opening inventory	10	8	80
6	Purchase	60	9	540
13	Sales	70	20	1,400
21	Purchase	150	10	1500
24	Sales	20	22	440
27	Purchase	90	10	900
30	Sales	30	25	750

 The company uses Periodic Inventory System. 

REQUIRED:

i.           Calculate the ending inventory cost and cost of goods sold using the following methods:

a.       First In First Out (FIFO) (2 marks)

b.       Last In First Out (LIFO) (2 marks)

c.       Weighted Average (round-off to TWO decimal point) (1.5 marks)

ii.          Based on the answer in (i), calculate the total gross profit. (1.5 marks)

iii.         Assuming you are the accountant of Syarikat Noah, suggest the inventory evaluation method that the company can achieve to:

a.         Minimize tax. (0.5 mark)

b.       Report highest profit. (0.5 mark)

 

Question 2

The following details are related to Syarikat Awadah transactions in January 2023:

Date	Explanation	Units	Unit Cost (RM)	Total cost (RM)
Jan 1	Opening Inventory	80	1.50	120
6	Purchase	240	1.60	384
10	Sale	200	4.00	800
15	Purchase	300	1.70	510
21	Sales	250	4.30	1,075
26	Purchase	200	1.90	380
28	Sales	220	4.50	990

Note: Syarikat Awadah adopts First In First Out (FIFO) 

REQUIRED:

Under Perpetual Inventory System, calculate:

(i)           Ending inventory at January 31, 2023. (9.5 marks)

(ii)        Cost of good sold for January 2023. (0.5 mark)

(iii)      Gross profit for January 2023. (2 marks)

ANSWER 

QUIZ – AA015 TOPIC 8 Part 2

ACCOUNTING FOR INVENTORIES

(16 / x 1/2 = 8 marks)

As Salam and Hi everyone... My name is Puan Asmazatul Yusfiziati Binti Mohd Yusof CA(M) or you can call me Madam Fizi. I'm an Accounting lecturer at Negeri Sembilan Matriculation College (KMNS), Kementerian Pendidikan Malaysia. This blog (www.madamfizi.com) was created to share learning materials on the subject of Accounting for Matriculation, Form 6, Foundation, Diploma, Secondary School and related students.