Part - 1

Gross Sales 139,875

Less: Sales Returns (1,375)
A Net Sales 138,500

B Less: Gross Profit on Sales @ 32% (44,320)

C Opening Stock & Purchases (124,955)

Less :Opening Balance of Stock 32,500

Less: Net Purchases 92,310
Purchase Returns (415) 91,895
Less: Freight In 560

D Total Loss of Inventory (A-B-C) (30,775)

1 Nov-01
Purchases A/c ………………..Dr 1,400
To Vendor A/c 1,400

2 Nov-05 Vendor A/c……………………..Dr 1,400

To Cash A/c 1,400

3 Nov-07 Purchase Returns A/c……….Dr 100

To Purchases A/c 100

Vendor A/c …………………..Dr 100

To Purchase Returns 100

Cash A/c ……………………….Dr 100

To Vendor A/c 100

4 Nov-10 Freight Inwards A/c …………Dr 80

To Cash A/c 80

5 Nov-13 Sundry Debtors A/c …………..Dr 1,500

To Sales A/c 1,500

6 Nov-16 Sales A/c…………………….Dr 200

To Sundry Debtors 200
A Computation of Cost using Weighted Average Method

Units Rate Total Cost

Jan-01 Opening Inventory 280.00 3.00 840.00

Mar-07 Purchases 600.00 4.00 2,400.00
Jul-28 Purchases 800.00 5.00 4,000.00
Oct-03 Purchases 1,000.00 6.00 6,000.00
Dec-19 Purchases 250.00 6.50 1,625.00

Hence, Closing Inventory Cost using Weighted Average Method is $ 14,865 having $5.07 per unit cost.

B Computation of Cost using FIFO Method

Units Rate Total Cost

Jan-01 Opening Inventory 280.00 3.00 840.00

Mar-07 Purchases 600.00 4.00 2,400.00
Jul-28 Purchases 800.00 5.00 4,000.00
Oct-03 Purchases 1,000.00 6.00 6,000.00
Dec-19 Purchases 250.00 6.50 1,625.00

Total 2,930.00 14,865.00

Hence, Cost of Closing inventory using FIFO Method is $ 14,865

C Computation of Cost using LIFO Method

Units Rate Total Cost

Jan-01 Opening Inventory 280.00 3.00 840.00

Mar-07 Purchases 600.00 4.00 2,400.00
Jul-28 Purchases 800.00 5.00 4,000.00
Oct-03 Purchases 1,000.00 6.00 6,000.00
Dec-19 Purchases 250.00 6.50 1,625.00
 Total 2,930.00 14,865.00

Hence, Cost of Closing Inventory using LIFO Method is $ 14,865

 Cumulative Cost & Units
Total Cost Total Units Weighted Average Price

840.00 280.00 3.00

3,240.00 880.00 3.68
7,240.00 1,680.00 4.31
13,240.00 2,680.00 4.94
14,865.00 2,930.00 5.07

having $5.07 per unit cost.