[go: up one dir, main page]
Scribd
Upload
8 views3 pages

Example 2-Subsidiary Ledger Card-Chapter 8

Uploaded by

milo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
8 views3 pages

Example 2-Subsidiary Ledger Card-Chapter 8

Uploaded by

milo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

Example 2: subsidiary ledger using FIFO, LIFO AND WEIGHTED AVERAGE

FIFO
kanaa Company uses the perpetual inventory system. It records purchases at gross invoice and sales at
its full invoice price. During March, the company had the following purchases and sales of Cakes:

March.1 Beginning Inventory of 300 units @ $4/unit.


March. 2 Purchased from Moulin d’or 500 units @ $5/unit n/30.
March. 3 Purchased 300 units from Wooden Bakery at $6/unit 2/10,n/30.
March.4 50 units were returned to Moulin d’or.
March.10 Sold 850 units to Keyrouz Bakery @ $10 / unit terms 2/10,n/30.
March.11 Kayrouz Bakery returned 100 units because they were outdated.
March.30 A physical count showed that 290 cakes are still on hand.

Let’s prepare the subsidiary ledger card ( Using FIFO Method)


Purchases Sales Balances
Date Description Qty UC TC Qty UC TC Qty UC TC
March.1 Beginning Inventory 300 4 1200

March.2 Purchase/Moulin d'or 500 5 2500 300 4


500 5 3700

March.3 Purchase/Wooden Bakery 300 6 1800 300 4


500 5
300 6 5500

March.4 Purchase return/Moulin d'or -50 5 -250 300 4


450 5
300 6 5250

March.10 Sale/Kayrouz bakery 300 4


450 5
100 6 4050 200 6 1200

March.11 Sale return/Kayrouz bakery -100 6 -600 300 6 1800

March.30 Inventory shrinkage 10 6 60 290 60 1740


LIFO Method
kanaa Company uses the perpetual inventory system. It records purchases at gross invoice and sales at
its full invoice price. During March, the company had the following purchases and sales of Cakes:

March.1 Beginning Inventory of 300 units @ $4/unit.


March. 2 Purchased from Moulin d’or 500 units @ $5/unit n/30.
March. 3 Purchased 300 units from Wooden Bakery at $6/unit 2/10,n/30.
March.4 50 units were returned to Moulin d’or.
March.10 Sold 850 units to Keyrouz Bakery @ $10 / unit terms 2/10,n/30.
March.11 Kayrouz Bakery returned 100 units because they were outdated.
March.30 A physical count showed that 290 cakes are still on hand.

Let’s prepare the subsidiary ledger card ( Using LIFO Method)


Purchases Sales Balances
Date Description Qty UC TC Qty UC TC Qty UC TC
March.1 Beginning Inventory 300 4 1200

March.2 Purchase/Moulin d'or 500 5 2500 300 4


500 5 3700

March.3 Purchase/Wooden Bakery 300 6 1800 300 4


500 5
300 6 5500

March.4 Purchase return/Moulin d'or -50 5 -250 300 4


450 5
300 6 5250

March.10 Sale/Kayrouz bakery 300 6


450 5
100 4 4450 200 4 800

March.11 Sale return/Kayrouz bakery -100 4 -400 300 4 1200

March.30 Inventory shrinkage 10 4 40 290 4 1160


WEIGHTED AVERAGE
kanaa Company uses the perpetual inventory system. It records purchases at gross invoice and sales at
its full invoice price. During March, the company had the following purchases and sales of Cakes:

March.1 Beginning Inventory of 300 units @ $4/unit.


March. 2 Purchased from Moulin d’or 500 units @ $5/unit n/30.
March. 3 Purchased 300 units from Wooden Bakery at $6/unit 2/10,n/30.
March.4 50 units were returned to Moulin d’or.
March.10 Sold 850 units to Keyrouz Bakery @ $10 / unit terms 2/10,n/30.
March.11 Kayrouz Bakery returned 100 units because they were outdated.
March.30 A physical count showed that 290 cakes are still on hand.

Average cost1= TC/Total units=(1,200+2,500)/(300+ 500)= $4.625


Average cost 2= TC/Total units= (3,700+ 1,800)/(800+300)=$5

Let’s prepare the subsidiary ledger card ( Using WEIGHTED AVERAGE Method)
Purchases Sales Balances
Date Description Qty UC TC Qty UC TC Qty UC TC
March.1 Beginning Inventory 300 4 1200

March.2 Purchase/Moulin d'or 500 5 2500 800 4.625 3700

March.3 Purchase/Wooden Bakery 300 6 1800 1100 5 5500

March.4 Purchase return/Moulin d'or -50 5 -250 1050 5 5250

March.10 Sale/Kayrouz bakery 850 5 4250 200 5 1000

March.11 Sale return/Kayrouz bakery -100 5 -500 300 5 1500

March.30 Inventory shrinkage 10 5 50 290 5 1450

You might also like