LTT had stock on hand on the 1st January 2018 of 100 heaters valued at $50 each.
The following transactions occurred during January:
Jan 7 $\quad$bought 110 heaters at $ \$ 52 $ each
$\quad$15$\quad$ sold 60 heaters at $ \$ 80 $ each (selling price
$\quad$30 $\quad$sold 70 heaters at $ \$ 80 $ each (selling price) REQUIRED:
a)Calculate cost of sales and closing stock at the end of the month from the above information using:
i)$\quad$ the FIFO methed of valuation,
ii)$\quad$ the LIFO method of valuation, and
iii) $\quad$the average cost method of valuation. b)Prepare a statement of comprehensive income for the month ended 31 January under each method assuming no stock loss (use a columnar approach).
c) 1) Which method produces the most favourable profit result for LTT?
ii) Comment on why the differences in profit have occurred under the 3 methods.

Question

LTT had stock on hand on the 1st January 2018 of 100 heaters valued at $50 each.
The following transactions occurred during January:
 Jan 7 $\quad$bought 110 heaters at $ \$ 52 $ each
$\quad$15$\quad$ sold 60 heaters at $ \$ 80 $ each (selling price
$\quad$30 $\quad$sold 70 heaters at $ \$ 80 $ each (selling price) REQUIRED:
a)Calculate cost of sales and closing stock at the end of the month from the above information using:
 i)$\quad$ the FIFO methed of valuation,
ii)$\quad$ the LIFO method of valuation, and
iii) $\quad$the average cost method of valuation. b)Prepare a statement of comprehensive income for the month ended 31 January under each method assuming no stock loss (use a columnar approach).
 c) 1) Which method produces the most favourable profit result for LTT?
ii) Comment on why the differences in profit have occurred under the 3 methods.

Quizplus · Accepted Answer

The Answer of LTT had stock on hand on the 1st January 2018 of 100 heaters valued at $50 each.
The following transactions occurred during January:
 Jan 7 $\quad$bought 110 heaters at $ \$ 52 $ each
$\quad$15$\quad$ sold 60 heaters at $ \$ 80 $ each (selling price
$\quad$30 $\quad$sold 70 heaters at $ \$ 80 $ each (selling price) REQUIRED:
a)Calculate cost of sales and closing stock at the end of the month from the above information using:
 i)$\quad$ the FIFO methed of valuation,
ii)$\quad$ the LIFO method of valuation, and
iii) $\quad$the average cost method of valuation. b)Prepare a statement of comprehensive income for the month ended 31 January under each method assuming no stock loss (use a columnar approach).
 c) 1) Which method produces the most favourable profit result for LTT?
ii) Comment on why the differences in profit have occurred under the 3 methods.

LTT Had Stock on Hand on the 1st January 2018 \quad

LTT Had Stock on Hand on the 1st January 2018 $\quad$