Question

Ibra Trader uses the perpetual inventory system. All sales returns from customers result in the goods...

Ibra Trader uses the perpetual inventory system. All sales returns from customers result in the goods being returned to inventory. Assume that there are no credit transactions and the inventory returned is not damaged. You are provided with the following information of the company for the month of April 2020.

Date

Description

Quantity

(kg)

Cost per unit

(OMR)

Selling price per unit

(OMR)

April 1

Beginning inventory

800

10

2

Purchase

400

12

5

Purchase return of 2nd dated

purchase

40

?

6

Purchase

240

12

11

Sale

1,000

?

18

18

Sale

300

?

20

23

Purchase

100

13

28

Sale

160

?

22

30

Sales return of 28th dated sale

10

?

22

Question – 4:

  1. You are required to calculate units and cost of goods sold; units and cost of ending inventory; and gross profit for each of the following cost flow assumptions.
    1. FIFO, and                                                                                                    (3.5 Marks)
    2. LIFO.                                                                                                           (3.5 Marks)
  2. Write any three control procedures to be followed over purchase.                      

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