BASIC FINANCE AND ACCOUNTS The Date

Free essays 0 Comments

BASIC FINANCE AND ACCOUNTS 1

BASICFINANCE AND ACCOUNTS

TheDate

detail

Debit

Credit

1-Jan

cash A|c

300000

LandA|C

100000

Building A|C

250000

Ordinary sheet A|C

650000

Been exchange of assets for common shares

2-Jan

Computer Equipment A|C

175000

Cash A|c 20%

35000

Note A|C 80%

140000

been a computer e4quipment purchased on cash and note

4th Jan

Advertisement A|c

1500

Creditors A|C

1500

Been amount due for advertisement from newspaper company

31st Jan

Salary A|C

5500

Cash A|c

5500

Been salary of research specialist paid

31-Jan

cash

250000

debtor A|C

150000

sales A|C

265000

been sale at cash and on debt account

31-Jan

Creditor A|C

1500

Advertisement A|C

1500

Been payment of advertisement

31-Jan

cash A|C

15000

Dividend A|C

15000

Been payment of dividend

Weightedaverage method

8000×5.15=41200

6500×5.25=34125

21000×5.30=113000

42500×5.85=248625

6500×6.25=40625

=475875/84500

=5.63165unit price under weighted average.

Unitsof goods sold

84500-24500=60000

Costof goods sold under weighted average

60000×5.63165=337875

Costof closing stock

24500closing inventory

5.63165× 24500=137975.425

Firstin First out

receipts

Issues

balance

unit

unit cost

total

unit

unit cost

total

unit

Unit cost

total

Opening. balance

8000

5.15

41200

8000

5.15

41200

2-Feb

6500

6500

5.25

34125

1-Apr

21000

5.3

11130

21000

5.3

111300

21000

5.3

111300

1-Jul

42500

5.85

248625

42500

5.85

248625

24500

5.85

143325

18000

5.85

105300

31-Oct

6500

6.25

40625

6500

6.25

40625

closing stock

24500

145925

Costof closing stock 145925

Endinginventory 24500

Usingfifo a will reflect high incomes and thus high taxable incomecompared to using weighted average cost. Thus I would prefer usingweighted average cost.

References

Needles,B. and Powers, M. (2011). Principlesof financial accounting.Australia: South-Western Cengage Learning.