Scribd Logo
Upload

Welcome to Scribd!

  • 158 views

    CFR Inventories Practice Questions

    Uploaded by

    tee
    1. The document provides details about inventories and cost of goods sold for multiple companies - Khewra Manufacturing, NKL Enterprises, Kids Party & Company, and Nawaz Manufacturing Limited. 2. For Khewra Manufacturing, the values of raw materials and finished goods inventories as of December 31, 2015 need to be calculated according to IAS 2. 3. For NKL Enterprises, the value of closing inventory of finished goods as of August 31, 2015 needs to be computed using the weighted average cost method. 4. For Kids Party & Company, the amount at which various inventory items should be carried as of December 31, 2017 needs to be calculated according to I

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    CFR Inventories Practice Questions

    Uploaded by

    tee
    158 views3 pages
    1. The document provides details about inventories and cost of goods sold for multiple companies - Khewra Manufacturing, NKL Enterprises, Kids Party & Company, and Nawaz Manufacturing Limited. 2. For Khewra Manufacturing, the values of raw materials and finished goods inventories as of December 31, 2015 need to be calculated according to IAS 2. 3. For NKL Enterprises, the value of closing inventory of finished goods as of August 31, 2015 needs to be computed using the weighted average cost method. 4. For Kids Party & Company, the amount at which various inventory items should be carried as of December 31, 2017 needs to be calculated according to I

    Original Description:

    cfr questions

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    1. The document provides details about inventories and cost of goods sold for multiple companies - Khewra Manufacturing, NKL Enterprises, Kids Party & Company, and Nawaz Manufacturing Limited. 2. For Khewra Manufacturing, the values of raw materials and finished goods inventories as of December 31, 2015 need to be calculated according to IAS 2. 3. For NKL Enterprises, the value of closing inventory of finished goods as of August 31, 2015 needs to be computed using the weighted average cost method. 4. For Kids Party & Company, the amount at which various inventory items should be carried as of December 31, 2017 needs to be calculated according to I

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    158 views3 pages

    CFR Inventories Practice Questions

    Uploaded by

    tee
    1. The document provides details about inventories and cost of goods sold for multiple companies - Khewra Manufacturing, NKL Enterprises, Kids Party & Company, and Nawaz Manufacturing Limited. 2. For Khewra Manufacturing, the values of raw materials and finished goods inventories as of December 31, 2015 need to be calculated according to IAS 2. 3. For NKL Enterprises, the value of closing inventory of finished goods as of August 31, 2015 needs to be computed using the weighted average cost method. 4. For Kids Party & Company, the amount at which various inventory items should be carried as of December 31, 2017 needs to be calculated according to I

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    1.

    3 KHEWRA MANUFACTURING
    Khewra Manufacturing was formed on 1 January 2015. The entity manufactures and sells a
    single product and values it on a first-in, first-out basis.
    One tonne of raw material is processed into one tonne of finished goods.
    The following details relate to 2015.

    Purchases of raw materials


    Purchases: 1,000 tonnes of raw materials per week
    Price: Rs.100,000 per tonne on 1 January, increasing to
    Rs.150,000 per tonne on 1 July
    Import duties: Rs.10,000 per tonne
    Transport from docks to factory: Rs.20,000 per tonne

    Production costs
    Production capacity: 1,500 tonnes per week
    Variable costs: Rs.25,000 per tonne
    Fixed costs: Rs.30,000,000 per week

    Sales details
    Selling price: Rs.240,000 per tonne
    Delivery costs to customers: Rs.8,000 per tonne
    Selling costs: Rs.4,000 per tonne

    Inventories at 31 December 2015


    Raw materials: 2,000 tonnes
    Finished goods: 2,000 tonnes
    There is a ready market for raw materials and the NRV of the raw materials is higher than its cost.

    Required
    Calculate and disclose the value of inventories at 31 December 2015 in accordance with IAS2.

    1.6 NKL ENTERPRISES


    NKL Enterprises produces a single product. On July 31, 2015, the finished goods inventory
    consisted of 4,000 units valued at Rs. 220 per unit and the inventory of raw materials was worth
    Rs. 540,000. For the month of August 2015, the books of account show the following:
    Rupees
    Raw material purchases 845,000
    Direct labour 735,000
    Selling costs 248,000
    Depreciation on plant and machinery 80,000
    Distribution costs 89,560
    Factory manager‘s salary 47,600
    Indirect labour 148,000
    Indirect material consumed 45,000
    Other production overheads 84,000
    Other accounting costs 60,540
    Other administration overheads 188,600
    Other information:
    (i) 8,000 units of finished goods were produced during August 2015.
    (ii) The value of raw materials on August 31, 2015 amounted to Rs. 600,000.
    (iii) There was no work-in-progress at the start of the month. However, on August 31, the value
    of work-in-progress is approximately Rs. 250,000.
    (iv) 5,000 units of finished goods were available in inventory as on August 31, 2015.

    Required:
    Compute the value of closing inventory of finished goods as on August 31, 2015 based on
    weighted average cost method
    .
    1.12 KIDS PARTY & COMPANY
    Kidz Party & Co. (KPC) manufactures and sells toys. Following information is available regarding
    four of its inventory items as on 31 December 2017:

    Cost per unit Normal selling price


    Items Units
    (Rs.) per unit (Rs.)
    Toy cars 10,000 1,250 1,200
    Doll houses 5,000 1,800 2,700
    Stuffed toys 1,850 1,200 1,900
    Minion costumes 870 1,500 2,500

    Following information is also available:


    (i) A sales order for 3,000 toy cars @ Rs. 1,100 per unit is in hand. The remaining units can
    be sold at normal selling price after incurring selling cost of Rs. 150 per unit.
    (ii) Doll houses include 1,000 defective units with no scrap value. 20% of the remaining doll
    houses are damaged and can be sold at 50% of cost.
    (iii) Stuffed toys costing Rs. 420,000 were accidentally damaged and are beyond repair. KPC
    plans to sell these toys as scrap. Proceeds from such sale are estimated at Rs. 175,000
    and the sale would require transportation cost of Rs. 6,300.
    (iv) All minion costumes have manufacturing faults and can be sold in present condition at Rs.
    1,350 per unit. However, 60% of the units can be rectified at a cost of Rs. 200 per unit
    after which they can be sold at Rs. 1,600 per unit.
    Required:
    Calculate the amount at which above inventory items should be carried as on 31 December 2017
    in accordance with IAS 2 ‗Inventories‘.
    1.13 NAWAZ MANUFACTURING LIMITED
    Nawaz Manufacturing Limited (NML) deals in various products. One of its product B2 is
    produced using raw material A1. Production is carried out after receiving confirmed sales
    order. Following information is available for the month of January 2017:
    (i) Opening inventory of A1 was 200 kg @ Rs. 3,000 per kg.
    (ii) Details of purchases made during the month ended 31 January 2017 are as follows:

    Date Quantity (kg) Price per kg (Rs.)


    1-Jan-17 250 2,800
    15-Jan-17 250 2,900
    50 kg of A1 purchased on 15 January 2017 were returned to the supplier on 16 January
    2017
    due to inferior quality of material supplied.
    (iii) On 18 January 2017, 100 kg of A1 were destroyed. They had no scrap value.
    (iv) Under normal circumstances 500 kg of A1 produce 400 liters of B2.
    (v) Labour cost per liter of B2 was Rs. 700.
    (vi) Overheads are estimated at 120% of labour cost. The actual overheads for the month were
    Rs.
    275,000.
    (vii) There is no opening and closing work in progress.
    (viii) Sales of B2 during the month of January were as follows:

    Quantity Sales price per


    Sale order date Delivery date liter (Rs.)
    (liters)
    2-Jan-17 4-Jan-17 100 7,000
    26-Jan-17 28-Jan-17 160 6,250

    (ix) NML uses weighted average method for valuation of inventory.

    Required:
    Prepare cost of goods sold statement for the month of January 2017 under each of the
    following methods:
    (a) Perpetual inventory method
    (b) Periodic inventory method

    You might also like