The company finds, to its error, that the cost of placing an order was Sh. 5,000 and carrying cost was 15% per year and not the earlier data. How much was the company losing per year on inventory because of imperfect information? (6 marks)

Cost of goods sold for Year 2 was $300,000. Sales for Year 2 were $600,000. Inventory was $40,000 at the end of Year 1 and $60,000 at the end of Year 2. The inventory turnover for Year 2 (rounded to one decimal) was:Multiple choice question.$600,000 / (($40,000 + $60,000) / 2) = 12.0 times$300,000 / $60,000 = 5.0 times$600,000 / $60,000 = 10.0 times$300,000 / (($40,000 + $60,000) / 2) = 6.0 times

Cake Mart understated its ending inventory in the current year by $5,000. The company incorrectly reported net income of $100,000. Determine the effect this error had on the financial statements.Multiple choice question.Total assets on the balance sheet will be too high by $5,000.Cost of goods sold was too low by $5,000, which caused net income to be overstated.Cost of goods sold will be too high by $5,000, and this caused net income to be understated by $5,000.Cost of goods sold will be too high by $5,000, and this caused net income to be overstated by $5,000.

Question # 1The cost of inventory on hand of a firm on 31-12-2013 was Rs. 800,000.There were doubtsregarding its condition and net realizable value. It was found that:• The good stocks were 75% and were expected to realize the normal sales price of costplus 25%.• 15% were slightly damaged and required an expenditure of 10% of the sale value formaking it readily saleable at the normal price.• 10% was damaged and would fetch only 60% of the normal sale price.Required:Value of inventory to be shown in the statement of financial position

73. Mario has incurred the following costs in relation to a unit of inventory: Particulars $ Raw materials cost 1.50 Import duties 0.40 Direct labour 0.50 Subcontracted labour costs 0.80 Recoverable sales tax 0.20 Storage costs 0.05 Production overheads (per unit) 0.25 There was a problem with the first batch of items produced, so abnormal wastage costs of $0.10 per unit have also been incurred by Mario. At what cost should Mario value this inventory in its financial statements? A $3.50 B $3.45 C $3.80 D $3.70 74. Which of the following statements regarding consolidated financial statements is correct? A For consolidation, it may be acceptable to use financial statements of the subsidiary where the year‐end differs from the parent by 2 months. B For consolidation, all companies within the group must have the same year end. C All companies within a group must have the same accounting policy in their individual financial statements. D The profit made on all intra‐group sales in the year must be removed from the consolidated financial statements. 75. ‘An associate is an entity over which the investor has significant influence’ (IAS28, para 3). Which TWO of the following indicate the presence of significant influence? A The investor owns 330,000 of the 1,500,000 equity voting shares of the investee B The investor has representation on the board of directors of the investee C The investor is able to insist that all of the sales of the investee are made to a subsidiary of the investor D The investor controls the votes of a majority of the board members

A company's inventory records report the following in November of the current year: Date Activities Units Acquired at Cost Units Sold at RetailNovember 1 Beginning inventory 5 units @ $28 = $140  November 2 Purchase 10 units @ $30 = $300  November 8 Sales   12 units @ $62November 12 Purchase 6 units @ $33 = $198  Using the LIFO perpetual inventory method, what was the amount recorded in the cost of goods sold account for the 12 units sold?Multiple Choice$334$356$378$244$282