CURRENT ASSETS(CA)

case
INVENTORY
 Acquisition, production, sale of inventory
A chocolate plant is having the following data on the month of December 2007, concerning its
chocolate production:
•Acquisition of cocobeans in chronological order:
• first acquisition 100 kg at 23.8 m.u./kg (19% VAT included),
•second acquisition 80 kg at 26,18 m.u./kg (19% VAT included),
•third acquisition 20 kg at 28,56 m.u./kg (19% VAT included),
•Consumption of cocobeans for chocolate: 190 kg (FIFO)
•Other ingredients (at acquisition cost)…………………………………………1,000 m.u
•Utility cost (net of VAT)………………………………………………………………....500 m.u
•Depreciation of the assembly line for the month…………………………….500 m.u
•Total cost with Salaries directly related to production…….……….…..4,000 m.u.
•250 kg of milk chocolate is ready to sale by the end of the month
•200 kg of chocolate are sold immediately with a 15% profit margin and 19% VAT

Requirements: provide the financial statements’ effects of the acquisition of cocobeans, production
& sale o chocolate; what if LIFO is used ?End of the month physical checking shows an 8kg inventory
of cocobeand of- explain the effects in the financial statements. The market price of chocolate by
end of December is 35 m.u/kg, is there any effect in the financial statements ?