Crystal arts uses the fifo method of stock control., Business Management

Assignment Help:

Crystal Arts

a) Opening stock is the price of a firm's stocks at the beginning of a trading period. The value is equal to that of the closing stock in the previous trading period. Clear definition is required for maximum marks.

b) Profit and Loss Account for Crystal Arts (this month)

 

LIFO ($)

FIFO ($)

 

Sales

15,000

15,000

 

Opening stock

5,000

5,000

10 @ $500 = $5,000

Plus Purchases

6,000

6,000

10 @ $600 = $6,000

Less Closing stock

2,500*

3,000#

* LIFO: 5 @ $500 = $2,500

COGS

8,500

8,000

# FIFO: 5 @ $600 = $3,000

Gross profit

6,500

7,000

 

Less Operating expenses

1,000

1,000

 

Operating profit before tax

5,500

6,000

 

Tax

1,650

1,800

@ 30% tax

Net profit after tax

3,850

4,200

 






 

Note that an extra 9.09% tax is paid if Crystal Arts uses the FIFO method of stock control. Given that chandeliers and the lower tax liabilities are non-perishable stocks; the firm may well prefer to use the LIFO method.

 


Related Discussions:- Crystal arts uses the fifo method of stock control.

Case of flex bump, Case of Flex bump Becker and Fagen are two observer...

Case of Flex bump Becker and Fagen are two observers of organizations. They are attempting to understand organizational dynamics, developments, and strategies in the firm FLEX

Discuss the rationale for technical analysis, Question 1: (a) With the ...

Question 1: (a) With the use of a diagram describe what is meant by indirect investing. (b) What are mutual funds? (c) The total market value of all stocks of Dodo Investmen

What pricing strategies would you recommend, Question: Price is the onl...

Question: Price is the only element of the marketing mix which generates revenue, the other elements being all associated with costs. Hence its determination is crucial for any

Proposal arguments, the strategies that are used to strengthen a proposal a...

the strategies that are used to strengthen a proposal argument and examples of each.

What you understand by the term "cost insurance freight", QUESTION 1 (a...

QUESTION 1 (a) Mr. Gentil, a Mauritian textile exporter, is proposing to enter into an international sales contract with a French importer, to sell his textile products. Advise

Business ethics, coca cola textbook.pdf 5653K View Download Eassy an...

coca cola textbook.pdf 5653K View Download Eassy and Project.png 138K View Download

Quality circle, A quality circle is a completely voluntary group of 6 to 8 ...

A quality circle is a completely voluntary group of 6 to 8 workers of a shop or who meet regularly during company time once very fortnight or ever month under die leadership o

Problem based on the business of education, Normal 0 false fa...

Normal 0 false false false EN-US X-NONE X-NONE

Caselets, What should Mr. Sharma have done to avoid the misunderstanding?qu...

What should Mr. Sharma have done to avoid the misunderstanding?question #Minimum 100 words accepted#

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd