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Assignment Exercise 1The following data referring to the beginning inventory and purchase of “Item A” is taken from the records of ABC Company that uses Periodic inventory systemJanuary 1 Inventory (BI)………………………………. 100 units @ 9/unit March 10 Purchase- 1st Purchase…………………….. 250 units @ 10/unit September 21 Purchase- 2nd Purchase ……………… 350 units @ 11/unit November 18 Purchase- 3rd Purchase……………….. 100 units @ 12/unit Assume units on hand at the end of the year were 300 units.Required: - Determine the cost of Ending Inventory (EI) and the Cost of Merchandise Sold (CMS), under the following inventory costing methodsFirst in First out (FIFO) MethodThe Average Cost MethodExercise 2: The Beginning Inventory, Purchases and Sales of ABC Company for its “Item B” during the month of January were as follows: Units CostJan. 1 Inventory 15 Birr 10 6 Sale 5 10 Purchase 10 12 20 Sale 8 25 Purchase 8 12.5 27 Sale 10 30 Purchase 15 14Required: - Determine the Cost of Ending Inventory (EI) as of January 31 and the Cost of Merchandise Sold (CMS) for the month, under the following inventory costing methods:Perpetual FIFO MethodPerpetual Moving Average MethodExercise 3. Suppose a business enterprise acquired a new machine at a cost of Birr30, 000. It is estimated that the machine has a residual value of Birr 5,000 at the end of its estimated life of 5 years. The company closes its book on December 31 of each year. Required: Compute the straight line depreciation for the year ending 2012 & record the journal entry. Assume further:The Machine is acquired on January 1,2012 The Machine is acquired on September 15,2012The Machine is acquired on September 18,2012Exercise 4Acquisition cost: Birr 27,000; Acquisition date: January 1, 2012Estimated Residual Value: Birr 2,000; Estimated Useful life: 5 years The Company closes its book on December 31 of each year.Required: Using double decline and sum of years digit method Compute the annual depreciation Indicate the Balance of Accumulated Depreciation & Book Value at the end of each year.Exercise 5 Assume that XYZ Company sells goods for €50,000 to AB Co with terms 3/10, net 30, and assume € 32, 000 and €18,000 are collected within and after the discount period respectively Required: Record the credit sales, and collections using both income and gross method?
