[PDF]Solution To Hammad Ltd Wala Question Inventory

Solution to Hammad Limited wala Question


Valuation of stock on the basis of lower of cost and NRV. usins* FIFO method


Item

Cost

NRV

Lower

Alpha

98,880

135,000

98,880

Gamma

4,267,125

4,520,000

4,267,125

Beta

605,574

444,000

444,000

4,810,005

Product Aloha

Cost




Opening stock

Qty.

Cost/unit

Value

20

3,000

60,000

Purchases

360

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Closing stock (Based on FIFO)

NRV

(W-3) 30

3,296

98,880

Estimated selling price (30 x 5 S 2Q0)

Less: Estimated cost to sell (30 x 700)



156,000

(21,000)

135,000

Product Gamma

Cost




Opening stock

_Qty-

Cost/unit

Value

100

48,000

4,800,000

Purchases

50

56,542.5

(W-l) 2,827,125

Closing stock (Based on FIFO) (W-3) 80

30

48,000

1,440,000


50

56,542.5

2.827.125

4.267.125

NRV




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4,640,000

Less: Estimated cost to sell (80 x 1,500)



(120,000)



Product Beta

Cost

_Qiy-..

Cost/unit

Value

Opening stock

30

4,000

120,000

Purchases

490

5,046.45

(W-l) 2,472,760


Closing stock (Based on FIFO) (W-3) 120 5,046.45

NKY

Estimated selling price (120 x 4,100)

Less: Estimated cost to sell (120x400)

Note: Selling price per unit is calculated using sales value and sales quantity.


605,574


492,000

(48,000)

444,000


fW-1) Total cost





Products


Alpha

Gamma

Beta

Quantity Purchased


360

50

490

Cost





Invoice value (A)


920,000

2,375,000

1,820,000

L/C opening (A x 0.5%)


4,600

11,875

9,100

Non-Refund_able duties (A x 23% x 60%)


126,960

327,750

251,160

T ransportati on ( W-2)


27,000

37,500

49,500

Cost of repacking (300 x 360): (1,500 x 50): (700 x 490)

108,000

75,000

343,000

Total cost


1,186,560

2,827,125

2,472,760

fW-2) Cost of transportation






.Alpha

Gamma

Beta


Units purchased A

360

50

490


Maximum capacity per trip B

20

2

15


No. of trips C= A/B

IS

25

33

(rounded)

Cost of transportation D - C x 1,500

27,000

37,500

49,500


(W-3) Calculation for number of units of closing stock






Alpha

Gamma

Beta

: Oponing stock


20

100

30

Purchases


360

50

490

Less: Sales


(350)

(70)

(400)



30

80

120