Surfers Paradise Sofa Private Limited is a hypothetical company that has been operating its business...
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Accounting
Surfers Paradise Sofa Private Limited is a hypothetical company that has been operating its business for the last couple of years. Using the perpetual inventory system, the firm prepares its financial statements at the end of each month. The information below related to one specific type of inventory has been extracted from the firms accounting records for August.
Date
Transactions
Quantity
$ Unit cost
May
1
Beginning balance
30
$3 600
5
Sales @ $9 680 per unit
18
To be calculated
10
Purchases
60
$4 080
17
Purchase return (from 10th May purchase)
6
$4 080
20
Sales @ $9 790 per unit
30
To be calculated
30
Sales return (from 20th May sales)
3
To be calculated
Required: a) Based on the above information, prepare an inventory card assuming the First In First Out cost flow
b) Identify the following:
1. The cost of inventory on hand on the last day of the month
2. The cost of sales for the month
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