MEMO - INVENTORY QUESTION (Source: Accounting - An introduction 14th edition) - Adjusted

1. a)

Purchases Cost of sales

Date
Units Unit price R Units Unit price R
01/03/2023 100 R1.00 R100.00
08/03/2023 300 R1.10 R330.00
15/03/2023 200 R1.20 R240.00
16/03/2023 300 R1.117 R335.00
22/03/2023 300 R1.30 R390.00
29/03/2023 100 R1.40 R140.00
31/03/2023 300 R1.236 R370.71
R705.71

Closing balance of inventory on 31 March 2023 = R494.29

1. b)

Purchases Cost of sales

Date
Units Unit price R Units Unit price R
01/03/2023 100 R1.00 R100.00

08/03/2023 300 R1.10 R330.00

15/03/2023 200 R1.20 R240.00

16/03/2023 100 R1.00 R100.00

200 R1.10 R220.00

22/03/2023 300 R1.30 R390.00

29/03/2023 100 R1.40 R140.00

 31/03/2023 100 R1.10 R110.00
200 R1.20 R240.00

R670.00

Closing balance of inventory on 31 March 2023 = R530.00

2. a)
Opening balance + Purchases for the year - Purchases returned for the year
Total units for the year

= R100 + R330 + R240 + R390 + R140

100 + 300 + 200 + 300 +100

= R1,200
1 000 units

= R1.20 average price per unit

Closing balance of inventory on 31 March 2023: 400 units x R1.20 = R480.00

2. b)
300 units x R1.30 = R390.00
100 units x R1.40 = R140.00
400 units R530.00

Closing balance of inventory on 31 March 2023 = R530.00

dition) - Adjusted

Value of inventory Calculations:

Units Unit price R
100 R1.00 R100.00 R100/100 units = R1.00 average price per unit
400 R1.075 R430.00 R430.00/400 units = R1.075 average price per unit
600 R1.117 R670.00 R670/600 units = R1.117 average price per unit
300 R1.117 R335.00
600 R1.208 R725.00 R725/600 units = R1.208 average price per unit
700 R1.236 R865.00 R865/700 unis = R1.236 average price per unit
400 R1.236 R494.29

Value of inventory
Units Unit price R
100 R1.00 R100.00
100 R100.00

100 R1.00 R100.00

300 R1.10 R330.00
400 R430.00

100 R1.00 R100.00

300 R1.10 R330.00
200 R1.20 R240.00
600 R670.00

100 R1.10 R110.00

200 R1.20 R240.00
300 R350.00

100 R1.10 R110.00

200 R1.20 R240.00
300 R1.30 R390.00
600 R740.00

100 R1.10 R110.00

200 R1.20 R240.00
300 R1.30 R390.00
100 R1.40 R140.00
700 R880.00
300 R1.30 R390.00
100 R1.40 R140.00
400 R530.00