Amartey Ltd. buys and sells cement in the local market at Kotokoraba. Below are the purchases and sales made by the entity during the year 2020;

Purchases

Date bags cost/bag (GHC)

Jan-20 20,000 25

Mar-20 20,000 30

Sep-20 40,000 35

Dec-20 10,000 33

Sales

May-20 20,000

Sep-20 20,000

Nov-20 35,000

There were 5,000 bags of cements in the inventory at 31st December 2019, valued at GHC22 per bag and the entity makes a profit margin of 20%.

Required:

a. Compute the value of inventory as at 31st May 2020, 30th September 2020 and 31st December 2020 using FIFO.

b. Calculate the gross profit and sales value for the period to 31 December 2020.

c. Using the weighted average, calculate the closing inventory at 31 December 2020 and prepare extracts from the statement of profit or loss and statement of financial position.

(Assume a profit mark-up of 30%)

asked by guest
on Nov 15, 2024 at 1:47 pm



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