Evaluate the cost of goods sold and ending inventory

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Reference no: EM132585047

Mohsin Sdn. Bhd. has the following information on inventory purchases, and sales for the month of May 2020.

Inventory, May 1

100 units

at RM8.50 each unit

RM 850

Purchases:

 

 

 

May 15

25 units

at RM10 each unit

RM250

May 24

40 units

at              RM15.95 each

unit

RM638

Sales:

 

 

 

May 20

35 units

at RM20 each unit

 

May 25

43 units

at RM25 each unit

 

Operating expenses for the month of May, RM454.

Required:

Question a. Under the perpetual inventory system, determine the cost of goods sold and ending inventory under the weighted average cost method.

 

Question b. Calculate the gross profit and profit for the month.

Question c. Assume at the end of May, all unsold inventory can only be sold at RM7 (market value) each unit. Record the journal entry to adjust the inventory amount to be reported at Lower of cost or market (LCM) in the SOFP.

Reference no: EM132585047

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