Reference no: EM132564472
Chanda B is a sole trader. He has the following purchases and sales of inventory for the month of march 2020: Purchases: 2nd March 200 units valued at K11 each; 12th March 400 units valued at K13 each; 20th March 250 units valued at K15 each. His sales are as follows: 10th March 300 units at K20 each; 15th March 450 units at K22 each; 29th March 270 units at K 22 each. The closing inventory for February 2020 was 200 units valued at K10 each.
Using the AVCO method of inventory valuation, answer the following questions.
Question 1. What is the value of closing inventory on 2nd March 2020?
Question 2. What is the value of closing inventory on 12th March 2020?
Question 3. What is the value of closing inventory on 15th March 2020?
Question 4. What is the value of closing inventory on 29th March 2020?
Question 5. What is the gross profit for the month of March 2020?
Question 6. The debtors balance on 31st January 2020 is K11,500. It is agreed by management to write off bad debts of K2,000. If the provision for doubtful debts is estimated at 12% of trade debtors outstanding at the month end.
what is the debtors balance that will be shown in the statement of financial position?
Question 7. A company has a debtors balance of K20,000 at the year end. 60 % of bad debts previously written off of K5, 000 will be paid in the coming year.
What account will be debited and credited and by how much?
Question 8. Refer to information in question 7. What will the debtors balance be at the year end?
Question 9. A company has the following balances on 31st October 2019, which is the end of its financial year. Salaries K520, 000; Fuel expenses K50,000; Insurance K10,000; Rent K36,000. Salaries and wages for September and October 2019 for two employees each earning K5,000 per month have not been included in the accounts. In addition, included in the salaries figure is a payment of K12,000 for hired labour for October and November 2019. Fuel expenses include a four month payment of K10,000 to 31st January 2020. Insurance is for one year to 31 December 2019. Rental expenses include K9,000 paid for the quarter beginning 1st October 2019.
What are the balances for salaries and wages, fuel, insurance and rent for the year ending 31st October 2019.
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