QUESTION 5: INVENTORY VALUATION AND PROBLEM SOLVING (33 mark…
QUESTION 5: INVENTORY VALUATION AND PROBLEM SOLVING (33 marks; 20 minutes) You are provided with information relating to Fashion Stores. The business sells one type of leather bag. The financial year ends on 30 April each year. The business uses the weighted average method for stock valuation and the periodic stock system. REQUIRED: 5.1 Calculate the value of the closing stock on 30 April 2021 using the weighted average method. (10) 5.2 Calculate the following for the year ended 30 April 2021: 5.2.1 Cost of sales (4) 5.2.2 Stockholding period in days (using closing stock) (4) 5.2.3 Calculate the number of leather bags missing. (6) INFORMATION: A. Stock Date Number of units Price per unit (including carriage on purchases) Total value 1 May 2020 440 R65 575 30 April 2021 310 ? ? B. Purchases of leather bags Date No. of units Cost price per unit Total purchases Carriage on purchases per unit Total carriage on purchases 30 Jul 2020 600 R150 90 000 R10 6 000 15 Nov 2020 800 R160 128 000 R10 8 000 18 Jan 2021 500 R155 77 500 R12 6 000 13 Mar 2021 300 R170 51 000 R12 3 600 TOTAL 2 200 346 500 23 600