ABC Enterprises provides you the following information related to the inventories for December 2020. ABC makes counting and recording of inventories…
BBS Financial Accounting and Analysis · 2077 · Solved Question with Answer
ABC Enterprises provides you the following information related to the inventories for December 2020. ABC makes counting and recording of inventories items only at end of each month.
Dec 1 Beginning inventory 700 units @ Rs 10 each
Dec 6 Purchased 900 units @ Rs 12 each
Dec 11 Purchased 1,000 units @ Rs 14 each
Dec 17 Sold 1,200 units @ Rs 16 each
Dec 20 Purchased 500 units @ Rs 14 each
Dec 27 Purchased 200 units @ Rs 15 each
Dec 31 Sold 1,500 units @ Rs 18 each
Required:
(a) What inventory system the ABC Enterprises is adopting?
(b) Ending inventory and cost of goods sold under the FIFO method assuming a periodic inventory system.
(c) Income statement showing net income, assume depreciation expenses Rs. 10,000 and other operating expenses Rs. 14,000.