Question

Section B (Bookkeeping Practice) - 5. Ali's Enterprise deals in salt with the following 2020 transactions: Purchases - 1 Feb: 100 bags @ #300 = #30,000; 1 Mar: 200 bags @ #300 = #60,000; 1 May: 300 bags @ #300 = #90,000. Sales - 10 Feb: 75 bags for #30,000; 10 May: 350 bags for #175,000. Opening stock 1 Jan 2020 was 50 bags valued at #12,500 (i.e. #250/bag). Required: (a) Store Ledger (FIFO method); (b) Trading Account for January to May 2020.

Accepted Answer

(a) STORE LEDGER (FIFO METHOD)
Jan 1: Balance b/f - 50 bags @ #250 = #12,500
Feb 1 (Receipt): 100 bags @ #300 = #30,000 -> Balance: 50 bags @ #250 (#12,500) + 100 bags @ #300 (#30,000) = 150 bags, #42,500
Feb 10 (Issue - FIFO): 50 bags @ #250 (#12,500) + 25 bags @ #300 (#7,500) = 75 bags issued, cost #20,000 -> Balance: 75 bags @ #300 = #22,500
Mar 1 (Receipt): 200 bags @ #300 = #60,000 -> Balance: 275 bags @ #300 = #82,500
May 1 (Receipt): 300 bags @ #300 = #90,000 -> Balance: 575 bags @ #300 = #172,500
May 10 (Issue - FIFO): 350 bags @ #300 = #105,000 (drawn as 75+200+75 bags in the store ledger workings) -> Balance carried down: 225 bags @ #300 = #67,500
Total receipts for the period: 600 bags, #180,000. Total issues: 425 bags, #125,000.

(b) ALI ENTERPRISE - Trading Account for the month of January to May 2020
Dr side: Opening stock #12,500; Add: Purchases #180,000; Cost of goods available for sale #192,500; Less: Closing stock #67,500; Cost of sales #125,000; Gross profit (balancing figure) #80,000; Total #205,000.
Cr side: Sales (#30,000 + #175,000) = #205,000.
Gross profit for the period = #80,000 (N205,000).

WAEC Book Keeping 2023 Theory — Question 10

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