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  • Accounting 2 Assignment (Fifo - Avco)

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    Muhammad Saad Riaz
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    - A local business bought and sold computers throughout February 2020 under the FIFO and AVCO inventory costing methods. - Under FIFO, the business recorded a gross profit of $3,210 with cost of goods sold of $33,420. Under AVCO, the gross profit was $3,206 with cost of goods sold of $33,424. - The document provides the purchase and sales transactions for the month and calculates the ending inventory, cost of goods sold, gross profit, and compares the results under each inventory costing method.

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    Accounting 2 assignment (fifo_avco)

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    - A local business bought and sold computers throughout February 2020 under the FIFO and AVCO inventory costing methods. - Under FIFO, the business recorded a gross profit of $3,210 with cost of goods sold of $33,420. Under AVCO, the gross profit was $3,206 with cost of goods sold of $33,424. - The document provides the purchase and sales transactions for the month and calculates the ending inventory, cost of goods sold, gross profit, and compares the results under each inventory costing method.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    5 views5 pages

    Accounting 2 Assignment (Fifo - Avco)

    Uploaded by

    Muhammad Saad Riaz
    - A local business bought and sold computers throughout February 2020 under the FIFO and AVCO inventory costing methods. - Under FIFO, the business recorded a gross profit of $3,210 with cost of goods sold of $33,420. Under AVCO, the gross profit was $3,206 with cost of goods sold of $33,424. - The document provides the purchase and sales transactions for the month and calculates the ending inventory, cost of goods sold, gross profit, and compares the results under each inventory costing method.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 5

    Fundamentals of

    Accounting
    AF1001
    Assignment 2
    Muhammad Ahmed Mukhtar
    22I-0096
    Question:
    A local business deals in trading a specific type of computer.
    It buys and sells the computers at different rates. Here are the
    details for the month of February 2020:
    2020
     Feb 1: Purchased 7 computers at the price of $490 per unit
     Feb 4: Purchased 15 computers at $530 per unit
     Feb 7: Sold 20 computers to ABC office at $570 per unit
     Feb 11: Purchased 30 computers at $545 per unit
     Feb 13: Returned 6 computers brought on 11th feb to supplier as
    they were faulty
     Feb 17: Sold 3 computers to CDA traders at $650 per unit
     Feb 19: Sold 20 computers to Alpha Pvt Ltd at $590 per unit
     Feb 20: Sold a computer to Mr.T for $680
     Feb 21: Purchased 18 computers at $560 per unit
     Feb 26: Sold 19 computers to Agency SBU at $600 per unit
     Feb 27: Agency SBU returned a computer due to an unknown
    reason.
    FIFO
    Store ledger card
    Recieved Issued Balance
    Date Qty Rate Amount Qty Rate Amount Qty Rate Amount
    Feb 1 7 490 3,430 7 490 3,430
    Feb 4 15 530 7,950 7 490 3,430
    15 530 7,950
    Feb 7 7 490 3,430
    13 530 6,890 2 530 1,060
    Feb11 30 545 16,350 2 530 1,060
    30 545 16,350
    Feb13 (6) 545 (3,270) 2 530 1,060
    24 545 13,080
    Feb17 2 530 1,060
    1 545 545 23 545 12,535
    Feb19 20 545 10,900 3 545 1,635
    Feb20 1 545 545 2 545 1,090
    Feb21 18 560 10,080 2 545 1,090
    18 560 10,080
    Feb26 2 545 1,090
    17 560 9,520 1 560 560

    Feb27 (1) 560 (560) 2 560 1,120


    34,540 33,420

    1,120
    Income Statement
    $ $
    Sales
    20*570 11,400
    3*650 1,950
    20*590 11,800
    1*680 680 37,230
    19*600 11,400
    Less sales return
    1*600 (600)
    Net sales 36,630
    Less cost of goods sold (33,420)
    Gross Profit 3,210
    1) Cost of net purchases = $34,540
    2) Cost of goods sold = $33,420
    3) Cost of closing inventory = $1,120
    4) Value of net sales = $36,630
    5) Gross Profit = $3,210

    AVCO
    Store ledger card

    Recieved Issued Balance


    Date Qty Rate Amount Qty Rate Amount Qty Rate Amount
    Feb 1 7 490 3,430 7 490 3,430
    Feb 4 15 530 7,950 22 517.27 11,380
    Feb 7 20 517.27 10,345 2 517.27 1,035
    Feb11 30 545 16,350 32 543.28 17,385
    Feb13 (6) (545) (3,270) 26 542.88 14,115
    Feb17 3 542.88 1,629 23 542.88 12,486
    Feb19 20 542.88 10,858 3 542.88 1,628
    Feb20 1 542.88 543 2 542.88 1,085
    Feb21 18 560 10,080 20 558.25 11,165
    Feb26 19 558.25 10,607 1 558.25 558
    Feb17 (1) 558.25 (558) 2 558.25 1,117

    34,540 33,424 1,117

    Income Statement:
    $ $
    Sales 37,230
    Less sales return (600)
    Net sales 36,630
    Less cost of goods sold (33,424)
    Gross Profit 3,206

    1) Cost of net purchases = $34,540


    2) Cost of goods sold = $33,424
    3) Cost of closing inventory = $1,117
    4) Value of net sales = $36,630
    5) Gross Profit = $3,206

    Income Statement:
    FIFO AVCO
    Sales 37,230 37,230
    Less sales return (600) (600)
    Net sales 36,630 36,630
    Less cost of goods sold (33,420) (33,424)
    Gross Profit 3,210 3,206

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