50.1K

Verified Solution

Link Copied!

Assignment a) Arnold company Ltd. sells its goods in returnable containers. The following information is relevant: The containers are purchased at N400 each. Customers pay a deposit of N700 per container issued to them and a refund of N650 is made for each container returned within two weeks. . 1 . On 1 Jan 2019, there were 15,000 containers in the company's warehouse and 10,000 containers in customers' hands the return period of which has not expired. In the year ended 31 Dec 2019, the Company purchased 30,000 containers. During the same period, the company issued 95,000 containers to customers, while 90,000 containers were returned. As at 31 Dec 2019, the customers still held 15,000 containers. The return period of 5,000 of the containers still held by customers as at 31 Dec 2019 had expired. The company scrapped 5,000 containers and sold them at N250 each. Apart from the containers scrapped, 1,500 containers could not be accounted for and were written off. In order to maintain the containers in proper condition, each container returned by a customer is polished at a cost of N4 each. At the end of the year, the company values containers in the warehouse and in customers' hands at N300 each for stock taking purposes. Required: Prepare the Containers Inventory account, Containers suspense account, Containers Sent to Customers account and Containers profit or loss account for the year ended 31st December 2019

Answer & Explanation Solved by verified expert

See Answer