Question 1

Marking
Bizedge.pk Scheme

Units in hand Units

Opening units 80
Units purchased 1,400
(450 + 300 + 250 + 400)
Sales (1,350)
(380 + 350 + 200 + 420)
Purchase Return (15)
(10 + 5)
Damaged & Written off (2)
Sales return 8
Drawings (1)

Closing stock 120 3.50 (0.50 each)

Cost of Closing Inventory (FIFO) Rs.

Per unit Cost of Last Purchase
Purchase price 65,000
Sales Tax 6,500
Shipment charges (270000/400) 675
Import duties @ 2% 1,300

Cost per unit 73,475 2.00 (0.5 each)

Net Realizable Value

Good units 75,000 1.00
Damaged Units (75000 x 90%) 67,500 1.00
Repair cost (5,000)
Repacking cost (2,500)
60,000
Value of Closing inventory
(At cost or NRV whichever is lower) Units @ Rs.
Good Units (120 - 20) 100 73,475 7,347,500 1.00
Damaged Units 20 60,000 1,200,000 1.50
120 8,547,500
10.00

Note: Alternative solutions are also acceptable if provide the same answers.
Question 2
Quality Product Limited
Jornal Entries
Sr. Date Description Dr. Cr.
1 10-Jan-22 FG Inventory 1,380,000 0.75
WIP Inventory 1,380,000
(Transfer to FG store)
2 14-Jan-22 Cash 1,500,000 0.75
Sales (3000 × 500) 1,500,000
(Goods Sold)
3 14-Jan-22 Cost of sales (660,000 + 460,000) 1,120,000 0.75
FG Inventory 1,120,000
(Cost of goods sold)
4 18-Jan-22 Cost of sales 115,000 1
FG Inventory 115,000
(Units replaced)
5 20-Jan-22 FG Inventory 1,000,000 0.75
WIP Inventory 1,000,000
(Transfer to FG store)
6 21-Jan-22 Cash 1,550,000 0.75
Sales (3100 × 500) 1,550,000
(Goods Sold)
7 21-Jan-22 Cost of sales (805,000 + 375,000) 1,180,000 0.75
FG Inventory 1,180,000
(Cost of goods sold)
8 23-Jan-22 Cash (100 × 1000) 100,000 1
P&L 150,000
Inventory 250,000
(Loss due to fire)
9 25-Jan-22 FG Inventory 540,000 0.75
WIP Inventory 540,000
(Transfer to FG store)
10 28-Jan-22 Cash 32,000 0.75
Sales (100 × 3200) 32,000
(Goods Sold)
11 28-Jan-22 Cost of sales (250,000) 250,000 0.75
FG Inventory 250,000
(Cost of goods sold)
12 31-Jan-22 Cost of sales 15,000 1
FG Inventory 15,000
(NRV write down)
9.75
 Marking
W-1 Inventory Ledger card (FIFO perpetual) Scheme
Date Particulars Receipts Issue Balance
Units Rate Amount Units Rate Amount Units Rate Amount
1-Jan Opening balance 300 2200 660,000 0.25
300 2200 660,000
10-Jan Units Manufactured 600 2300 1,380,000
600 2300 1,380,000 0.25
300 2200 660,000
14-Jan Sale of units
200 2300 460,000 400 2300 920,000 0.25
18-Jan Sales return (50) (2,300) (115,000) 450 2300 1,035,000 0.50
18-Jan Units scrapped 50 2300 115,000 400 2300 920,000 0.50
18-Jan Units replaced 50 2300 115,000 350 2300 805,000 0.50
350 2300 805,000
20-Jan Units Manufactured 400 2500 1,000,000
400 2500 1,000,000 0.25
350 2300 805,000
21-Jan Sale of units
150 2500 375,000 250 2500 625,000 0.25
23-Jan Loss due to fire 100 2500 250,000 150 2500 375,000 0.50
150 2500 375,000
25-Jan Units Manufactured 200 2700 540,000
- 200 2700 540,000 0.25
50 2500 125,000
28-Jan Units sold 100 2500 250,000
200 2700 540,000 0.25

W-2 NRV of closing stock (0.5) W-3 Value of closing Stock (1) 1.50
Cost of closing stock 5.25
Expected selling price 2800 (125,000 + 540,000) 665,000
Modification cost (200) NRV of clsoing stock
2600 (2600 × 250) 650,000
NRV writedown 15,000