Question

Presented below is information related to Bramble Enterprises.

		Jan. 31		Feb. 28		Mar. 31		Apr. 30
Inventory at cost		$17,100		$17,214		$19,380		$15,960
Inventory at LCNRV		16,530		14,364		17,784		15,162
Purchases for the month				19,380		27,360		30,210
Sales for the month				33,060		39,900		45,600

(a)

From the information, prepare (as far as the data permit) monthly income statements in columnar form for February, March, and April. The inventory is to be shown in the statement at cost; the gain or loss due to market fluctuations is to be shown separately (using a valuation account

Answer 1

Feb Mar 17,214 Cost of goods sold :- Particulars Opening inventory at cost Add: Purchases Less: Ending inventory Cost of goods sold 17,100 19,380 17,214 19,266 April 19,380 30,210 15,960 27,360 19,380 25,194 33,630 Income Statement :- Particulars Sales Less: Cost of goods sold Income Feb 33,060 19,266 13,794 Mar 39,900 25,194 14,706 April 45,600 33,630 11,970 Inventory fluctuation :- Particulars Increase in inventory as per LCNRV Less: increas in inventory as per cost = closing- opening Net fluctuations affecting the income Feb (2,166) Mar 3420 April -2622 114 2166 -3420 (2,280) 1,254 798