Page 81 - Accountancy_F5

Revision exercise

1. The records extracted from Lelo Traders books of accounts, revealed the
following information:

1 January 2023 Purchased raw material 250 units for TZS 2,500,000
st
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2 January 2023 Purchased raw material 100 units for TZS 1,200,000
nd
3 January 2023 Issued 300 units for production
rd
15 October 2023 Purchased raw material 150 units for TZS 2,250,000
th
30 October 2023 Purchased raw material 100 units for TZS 1,250,000
th
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1 November 2023 Issued raw material 125 units
st
Required:

1. Calculate the quantity and value of inventory on 31 December 2023 using:
st
(a) FIFO; and
(b) Weighted average method.

2. Bobo valued its closing inventory on 31 December 2023 at TZS 25,000,000. The
st
profit disclosed during 2023 was TZS 40,000,000. After some time, it was found
that the correct value of inventory was TZS 22,500,0000. Choose the correct answer
from the list below to identify the effect of the above error in the reported profit:
(a) The error understated profit by TZS 2,500,000.

(b) The error overstated profit by TZS 25,000,000.
(c) The error overstated profit by TZS 2,500,000.
(d) The error understated profit by TZS 25,000,000co
3. The following information relates to the data for items stored by Maruku Traders:

Date Details Units Unit cost Total cost
September 2023 TZS TZS
1 st Opening inventory 300 10,000 3,000,000

8 th Purchases 150 10,100 1,515,000
13 th Sales 200 - -

21 st Sales 350 - -

22 nd Purchases 400 12,000 4,800,000

30 th Sales 450 - -

Student’s Book Form Five
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