Woodland Ltd is a home furniture retailer and wholesaler selling affordable home furniture. During the year ended 30 June, it made the following purchases of home office desks:Date # Units Price ($)July 250 30September 300 42November 350 50April 380 30As at 1 July, Woodland Ltd had 25 desks in inventory, which were costed at $450 per unit. As at 30 June, an inventory count revealed 29 desks in inventory.RequiredCompare the value of the desks on hand as at 30 June to be included in the inventory balance on the statement of financial position, under the following cost flow assumptions:i)FIFOii)Weighted-average
Question
Woodland Ltd is a home furniture retailer and wholesaler selling affordable home furniture. During the year ended 30 June, it made the following purchases of home office desks:Date # Units Price (450 per unit. As at 30 June, an inventory count revealed 29 desks in inventory.RequiredCompare the value of the desks on hand as at 30 June to be included in the inventory balance on the statement of financial position, under the following cost flow assumptions:i)FIFOii)Weighted-average
Solution
Sure, here's how you can calculate the value of the desks on hand as at 30 June under the FIFO and weighted-average cost flow assumptions:
- FIFO (First-In, First-Out): This method assumes that the first goods purchased are the first ones to be sold. So, the inventory at the end of the period consists of the goods most recently purchased.
Step 1: Calculate the total number of desks purchased during the year.
Total desks purchased = 250 (July) + 300 (September) + 350 (November) + 380 (April) = 1,280 desks
Step 2: Calculate the total number of desks sold during the year.
Total desks sold = Total desks purchased + Beginning inventory - Ending inventory Total desks sold = 1,280 + 25 - 29 = 1,276 desks
Step 3: Determine the cost of the desks sold and the cost of the desks remaining in inventory.
The first 1,276 desks sold would come from the beginning inventory and the purchases made in July, September, and November. The remaining 29 desks in inventory would come from the April purchase.
Cost of desks in inventory = 29 desks * 870
- Weighted-average: This method calculates a weighted average cost per unit of inventory, which is then used to determine the cost of goods sold and the cost of ending inventory.
Step 1: Calculate the total cost of desks purchased during the year.
Total cost of desks purchased = (250 desks * 42) + (350 desks * 30) = 12,600 + 11,400 = $49,000
Step 2: Calculate the weighted average cost per desk.
Weighted average cost per desk = Total cost of desks purchased / Total desks purchased Weighted average cost per desk = 38.28 (rounded to the nearest cent)
Step 3: Determine the cost of the desks remaining in inventory.
Cost of desks in inventory = 29 desks * 1,110.12
So, under the FIFO method, the value of the desks on hand as at 30 June would be 1,110.12.
Similar Questions
Woodland Ltd is a home furniture retailer and wholesaler selling affordable home furniture. During the year ended 30 June, it made the following purchases of home office desks:Date # Units Price ($)July 250 30September 300 42November 350 50April 380 30As at 1 July, Woodland Ltd had 25 desks in inventory, which were costed at $450 per unit. As at 30 June, an inventory count revealed 29 desks in inventory.RequiredCompare the value of the desks on hand as at 30 June to be included in the inventory balance on the statement of financial position, under the following cost flow assumptions:i)FIFOii)Weighted-average
26 Enter the following transactions in the Purchases Book of Bharat Furniture House, Delhi: Feb 3 Bought goods from Rajat Furniture House, Delhi vide Invoice No. 053 25 Chairs @ 400 each 20 Tables @ 800 each Less: 10% Trade Discount Feb 9 Purchased from Jasmine Furniture's, Rohtak 5 Sofa sets @ 4,000 each 5 Centre Tables @ 2,000 each Less: 15% Trade Discount. Feb 21 Purchased delivery van for ₹1,50,000 from Mahindra Sons on two month credit. Feb 25 Bought goods from Goyal Furniture House vide cash memo no. 103 30 Almirahs @ 5,000 each.
A wholesale furniture company wants to design a data warehouse for the analysis of the company’s situation with respect to the Furniture, Customers and Time. Moreover, the company needs to analyse:• the furniture with respect to its type (chair, table, wardrobe, cabinet. . . ), category (kitchen, living room, bedroom, bathroom, office. . . ) and material (wood, marble. . . )• the customers with respect to their location, by considering at least cities, regions and statesThe main objective of the company is to know at least the quantity, income and discount of its sales.2|Pagea) Identify facts, measures and dimensions to satisfy the main objectives of the company.b) Design a FACT CONSTELLATION schema to analyse the company’s above needs.
Office furniture was bought on 1st April 2015 for Ksh. 800,000. It isassumed that the furniture depreciates at the rate of 15% p.a. Youare required to clearly show the DEPRECIATION AMOUNTS, NETBOOK VALUES and also the BALANCE SHEET Extracts for eachof the years 2015, 2016 and 2017 using EACH of the methodsbelow separately:-I) Straight – Line Method (4 marks)II) Reducing – Balance Method
A startup company produces luxury furniture. It purchases wood from a local lumber mill and turns the wood into tables, chairs, and desks. Once the furniture is finished, trucks take it to a local mall where it is sold at a specialty store. Customers come from all over the state to buy new pieces of furniture that arrive each month.Which element of the story represents a product market in the circular flow model?A.The customers who shop at the mallB.The furniture companyC.The lumber millD.The specialty store in the mall
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.