Answer to Question #291931 in Accounting for Brai

Question

Below are the values of Inventory transactions relating to PESAKULANGA Business in the month of November 2019. Applying the FIFO Method of inventory accounting; Calculate the values in Dollars for Both Cost of goods sold and Closing inventory for the year ended

Food for thought 16:

(a) Differentiate between Stock Taking and Stock Control               

(b) From the following Table calculate the closing inventory value in TZS in trade that would be shown in the financial statements under a periodic method using FIFO system at the end of the trading period.                                   

 

Beginning Inventory were 10Units at a cost price of TZS 120 each​

Transaction Type

Number of Units

Unit Cost (TZS)

Purchased

60

1,350

Sold

40

 

Purchased

70

1,430

Sold

40

 

Sold

50

 

Purchased

60

1,510

Answer 1

Requirement a

Stock taking is the process physically counting the inventory and physically verifying the condition of the inventory. The main objective of the stock taking is to identify the wastage or damages if any happened to the inventory.

Stock control is process of ensuring that sufficient stock levels are maintained to meet the demand by keeping the inventory holding cost at the minimum level.

Requirement b

Cost of Goods Sold

units 130

Value 168,000

ending Inventory

units 70

Value 104,900