Reference no: EM132493308

Allocating cost (weighted average formula), reporting gross profit and applying the NRV rule ** Nanning Ltd wholesales bicycles. It uses the perpetual method and allocates cost to inventories using the "34' 5' 6' 7 moving weighted average formula. The company's reporting date is 31 March. At 1 March 2024, inventories on hand consisted of 400 bicycles at $92 each and 54 bicycles at $96 each.

During the month ended 31 March 2024, the following inventories transactions took place (all purchase and sales transactions are on credit).

1. March 1 Sold 200 bicycles for $150 each. 3 Five bicycles were returned by a customer. They had originally cost $92 each and were sold for $150 each.
2. 9 Purchased 60 bicycles at $94 each
3. 10 Purchased 80 bicycles at $98 each.
4. 15 Sold 62 bicycles for $165 each.
5. 17 Returned one damaged bicycle to the supplier. This bicycle had been purchased on 9 March.
6. 22 Sold 74 bicycles for $155 each. 26 Purchased 82 bicycles at $104 each.
7. 29 Two bicycles, sold on 22 March, were returned by a customer. The bicycles were badly damaged so it was decided to write them off. They had originally cost $94 each.

Required

Question 1. Calculate the cost of inventories on hand at 31 March 2024 and the cost of sales for the month of March. (Round the average unit cost to the nearest cent, and round the total cost amounts to the nearest dollar.)

Question 2. Prepare the inventories general ledger control account (in T-format) as it would appear at 31 March 2024.

Question 3. Calculate the gross pro?t on sales for the month of March 2024.