2020 SACSS 3N POA EOY P2 Q2
Date | Number of items bought | Amount ($) | |||
2020 | |||||
May 6 | Goods were bought by cheque | 80 | 6 400 | ||
15 | Goods were bought by cheque | 40 | 3 000 | ||
25 | Goods were bought by cheque | 40 | 5 000 | ||
Date 2020 | Number of items sold | Amount ($) | |
May 17 | Goods were sold by cash | 120 | 12 070 |
28 | Goods were sold by cash | 40 | 4 800 |
REQUIRED
a. What does FIFO stand for?
[1]
b. Prepare the inventory account for the month of May 2020. Bring the balance down to the next month.
[7]
c. Calculate the gross profit for the month ended 31 May 2020.
[3]
On 13 August a flash flood caused some goods costing $2000 to be destroyed.
e. Name the accounting concept followed in part (d).
[1]
[TOTAL 15]
SOLUTION
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a)
FIFO stands for First In First Out.
b)
c)
d)
e)
Prudence concept