Tutorial 8 Inventories
1
LTJ 2020
Tutorial 8 – Accounting for Inventories
Section A:
1. An organisation’s inventories as at 1 April are 15 units @ RM3.00 each.
The following movements occur:
05 April 2018 10 units sold at RM3.30 each
11 April 2018 20 units bought at RM3.50 each
18 April 2018 16 units sold at RM4.00 each
What is the value of the closing inventories at 31 April if the FIFO
method of inventory valuation is used?
2. Your organisation uses the weighted average cost method of valuing
inventories. During May 2018, the following inventories details were
recorded:
Opening balance 30 units valued at RM2.00 each
06 May 2018 purchases of 50 units at RM2.40 each
13 May 2018 issue of 40 units
TaufooFa Sdn. Bhd. adopted the inventories flow assumption of first-in
first-out (FIFO) when matching purchases with sales for each of the five
years.
Required:
Prepare a trading account for each of the five years.
Question 4
Lorenzo runs a workshop which sells several grades of petrol. On 30 April
2018, the tank containing unleaded petrol was empty. Set out below are the
records for receipts and sales of unleaded petrol during May 2018.
Purchase
Sales
Litres
Price per litre
Litres
Price per litre
1 May
75,000
RM0.50
1 May – 7 May
67,500
RM0.60
8 May
75,000
RM0.52
8 May – 14 May
75,000
RM0.65
15 May
60,000
RM0.54
Units purchased
(per unit)
6,000
12,000
18,000
18,000
48,000
45,000
RM0.68
22 May
60,000
RM0.56
37,500
RM0.70
