Hi dear, both questions please, they both are part of Question 2.
Please assist urgently.
QUESTION 2
2.1 REQUIRED
Use the information given below to calculate the value of closing inventory as at 31 March 2020 and value of issues to production for March 2020 using the:
2.1.1 Weighted average cost method.
2.1.2 First-in-first-out (FIFO) method.
INFORMATION
The following transactions of Dreamcoat Manufacturers, which uses the periodic inventory system, took place during March 2020 in respect of a component used in production:
March 01
Opening inventory 4,000 units @ R20 per unit
16
Purchased from a supplier 15,000 units @ R21 per unit
17
Returned to the supplier (purchased on 16 March 2020) 2,000 units
20
Purchased from supplier 3,000 units @ R22 per unit
31
Issues to production during March 2020 16,000 units
2.2 REQUIRED
Use the following financial data to prepare the Pro Forma Statement of Financial Position of Plexicor Inc. as at 31 December 2020.
INFORMATION
A financial manager at Plexicor Inc. has gathered the following financial data needed to prepare a Pro Forma Statement of Financial Position for the coming year ending 31 December 2020:
- Sales for 2020 is estimated to be R7,500,000.
- Inventory represents 24% of sales, estimated to be R500,000.
- Trade and other payables represent 18% of sales.
- 150,000 shares are expected to be issued at R2 each during the first quarter of 2020.
- Dividends amounting to R400,000 are expected to be declared at the end of 2020 and are payable during 2021.
- The long-term loan is estimated to be reduced by 10% during 2020.
- The amount of cash and cash equivalents must be determined (balancing figure).
- The Statement of Financial Position for the year ended 31 December 2019 is as follows:
PLEXICOR INC. STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019
R
ASSETS
Non-current assets
Fixed/Tangible assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
4,100,000
4,100,000
2,900,000
1,800,000
900,000
200,000
7,000,000
EQUITY AND LIABILITIES
Equity
Ordinary share capital
Retained earnings
Non-current liabilities
Long-term loan
Current liabilities
Trade and other payables
Total equity and liabilities
4,600,000
3,300,000
1,300,000
1,000,000
1,000,000
1,400,000
1,400,000
7,000,000