Question

Q7 On 1 July 20x2 (the first day of the financial year), Large Mart decides to start selling electric bicycles (e-bikes). Initially, Large Mart places an order for 15 e-bikes (for $1,000 per e-bike), and the first e-bikes arrive at Large Mart on 5 July 20x2. Following an advertising campaign, the e-bikes become a big seller and Large Mart makes the following sales and purchase transactions during the year ended 30 June 20x3:  Sale (10 August 20x2) of 12 e-bikes for a price of $2,500 per e-bike  Purchase (1 September 20x2) of 8 e-bikes for $900 per e-bike  Sale (5 September 20x2) of 5 e-bikes for $2,000 per e-bike  Sale (12 November 20x2) of 6 e-bikes for $2,300 per e-bike Large Mart accounts for its inventory using the “first-in-first-out” cost flow assumption and the perpetual inventory system. Required: A) Calculate the cost of all e-bikes sold during the year ended 30 June 20x3, AND outline all necessary calculations. B) Calculate the value of all e-bikes that remain in the inventory account on 30 June 20x3, AND outline all necessary calculations. C) Calculate the amount of sales revenue that the e-bikes have generated for Large Mart during the year ended 30 June 20x3, AND outline all necessary calculations. (1 mark) D) Calculate the gross profit that Large Mart has generated through the sales transactions described in this question during the year ended 30 June 20x3, AND outline all necessary calculations. (1 mark)

Answer 1