question archive Company A provided the following data: P 500,000 770,000 3,070,000 4,300,000 70,000 45,000 Beginning inventory Cost Selling price Purchases: Cost Selling price Transportation in Purchase discount Purchase return: Cost Selling price Sales return Sales discount Markup Markdown Cancelation of markup Cancelation of markdown Sales 25,000 40,000 80,000 20,000 100,000 350,000 30,000 10,000 4,000,000 Determine estimated cost of ending inventory under: (1) LCNRV approach (2) Average cost approach (3) FIFO approach
Company A provided the following data: P 500,000 770,000 3,070,000 4,300,000 70,000 45,000 Beginning inventory Cost Selling price Purchases: Cost Selling price Transportation in Purchase discount Purchase return: Cost Selling price Sales return Sales discount Markup Markdown Cancelation of markup Cancelation of markdown Sales 25,000 40,000 80,000 20,000 100,000 350,000 30,000 10,000 4,000,000 Determine estimated cost of ending inventory under: (1) LCNRV approach (2) Average cost approach (3) FIFO approach
Subject:AccountingPrice:2.84 Bought3
Company A provided the following data: P 500,000 770,000 3,070,000 4,300,000 70,000 45,000 Beginning inventory Cost Selling price Purchases: Cost Selling price Transportation in Purchase discount Purchase return: Cost Selling price Sales return Sales discount Markup Markdown Cancelation of markup Cancelation of markdown Sales 25,000 40,000 80,000 20,000 100,000 350,000 30,000 10,000 4,000,000 Determine estimated cost of ending inventory under: (1) LCNRV approach (2) Average cost approach (3) FIFO approach
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
| a) Calculation Of cost of inventory based on LCNRV Approach | ||||||||||||
| Cost | Net Realisable Value | |||||||||||
| Particulars | Cost | Net Realisable Value | Sale | 4000000 | 4000000 | |||||||
| Beginning Inventory | 500000 | 770000 | Less: Markup-Cancellation of markup | -70000 | ||||||||
| Purchase | 3070000 | 4300000 | Less: Markdown-Cancellation of markdown | -340000 | ||||||||
| Add - Transportation In | 70000 | Less: Sale Return | -80000 | -80000 | ||||||||
| Less - Purchase Discount | -45000 | Less: Sale Discount | -20000 | -20000 | ||||||||
| Less : Purchase Return | -25000 | -40000 | Net Sale | 3490000 | 3900000 | |||||||
| Less: Net Sale | -3490000 | -3900000 | ||||||||||
| Clossing Value | 80000 | 1130000 |
| b) Calculation Of cost of inventory based on Average Cost Approach | ||||
| Particulars | Cost | |||
| Beginning Inventory | 500000 | |||
| Purchase | 3070000 | |||
| Add - Transportation In | 70000 | |||
| Less - Purchase Discount | -45000 | |||
| Less : Purchase Return | -25000 | |||
| Average cost of goods bought | 3570000 | |||
| c) Calculation of Cost of Ending Inventory by FIFO Approach | ||||
| Sr. No | Particulars | Inward | OutWard | Closing Balance |
| 1 | Opening Balance | 500000 | 0 | 500000 |
| 2 | Purchase | 3095000 | 0 | A. 500000 |
| (=3070000+70000-45000) | B. 3095000 | |||
| 3 | Purchase Return | 0 | 25000 | A. 475000 |
| B. 3095000 | ||||
| 4 | Sales | 0 | 3570000 | A.0 |
| (Adj Markup, Markdown, Discount) | (=4000000-100000-350000+30000+10000-20000) | B. 0 | ||
| 5 | Sale Return | 80000 |
