ASSIGNEMENT: FINANCIAL MANAGEMENT

SUBMITTED TO: SIR SHOAIB NISAR

SUBMITTED BY: FARIDA KAUSAR
ROLL NO: MBA-18-32
CLASS : MBA-4TH SMESTER

Problem 1

1. Computer cost of gods sold available for sale and the number of units available for sale.

Beginning inventory 600 units $44=26400

Purchase 200 units $40=8000
Purchase 100 units $20=2000
Purchase 160 units $60=9600
Purchase 280 units $48=13440
Total computer units & cost 1340 $59440

2. Computer the number of units in the ending inventory.

Beginning inventory 600

Purchase 200
Purchase 100
(-) sales 400
Purchase 160
Purchase 280
(-) sales 200
Ending inventory 740

3. FIFO

Purchase issued balance

Date Units Rate amount Units Rate Amount Units Rate Rs
Jan 1 600 44 26400
beaning
inventor
y
Feb 10 200 40 8000 600 44 26400
200 40 8000
Mar 13 100 20 2000 600 44 26400
 200 40 8000
100 20 2000
Mar 15 400 44 17600 200 44 8800
200 40 8000
100 20 2000
Aug 21 160 60 9600 200 44 8800
200 40 8000
100 20 2000
160 60 9600
280 48 13440
Sep 15 200 44 8800 200 40 8000
100 20 2000
160 60 9600
280 48 13440
Ending 740 33040
inventory

LIFO

Purchase issued balance

Date Units Rate Amount Units Rate Amount Units Rate Amount
Jan 1 600 44 26400
beaning
inventory
Feb 10 200 40 8000 600 44 26400
200 40 8000
Mar 13 100 20 2000 600 44 26400
200 40 8000
100 20 2000
Mar 15 (400) 20 2000
100
200 40 8000
100 44 4400
500 44 22000
Aug 21 160 60 9600 500 40 22000
160 60 9600
Sep 5 280 48 13440 500 40 22000
160 60 9600
280 48 13440
(200) 48 9600 500 44 22000
Sep 10 200 160 60 9600
80 48 3840
Ending 740 35440
inventory

Weighted average method

 Purchase sale balance
Date Units Rate Amount Units Rate Amount Units Rate Rs
Jan1 600 44 26400
beginnin
g
inventory
Feb 10 200 40 8000 800 43 34400
Mar 13 100 20 2000 900 41 36400
Mar 15 (400) 41 16400 500 41 20500
400
Aug 21 160 60 9600 660 46 30100
Sep 5 280 48 13440
Sep 10 (200) 46 9200 740 46 34040
200

Problem 6-4A
1. Computer the number and total cost of the units available for sale.

Units $
Beginning 20,000 15 300,000
inventory
Mar 7 28000 18 50,4000
May 25 30000 22 660,000
Aug 1 20000 24 480,000
Nov 10 33000 27 891,000
Total units $cost 131000 2835000

FIFO

Purchase sales balance

Date Units Rate Amount Units Rate Amount Units Rate Rs
1 Jan 20000 15 30000
Mar 7 28000 18 504000 28000 18 504000
Mar 25 30000 22 660000 20000 15 30000
28000 18 504000
30000 22 660000
Aug 1 20000 24 480000 20000 15 30000
28000 18 504000
30000 22 660000
20000 24 480000
Nov 10 33000 27 891000 20000 15 30000
28000 18 504000
30000 22 660000
20000 24 480000
33000 27 891000
Dec 31 (3500) 15 30000 13000 18 234000
2000
 15000 18 270000 30000 22 660000
20000 24 480000
33000 27 891000
Ending 96000 2265000
inventor
y

LIFO

Purchase sales balance

Date Units Rate Amoun Units Rate Amount Units Rate Amount
t
Beginnin 20000 15 300000
g
inventory
1 Jan
Mar 7 28000 18 504000 20000 15 300000
28000 18 504000
May 25 30000 22 660000 20000 15 300000
28000 18 504000
30000 22 660000
Aug 1 20000 24 480000 20000 15 300000
28000 18 504000
30000 22 660000
20000 24 480000
Nov 10 33000 27 891000 20000 15 300000
28000 18 504000
30000 22 660000
20000 24 480000
33000 27 891000
Dec 31 (3500) 27 89100 20000 15 300000
33000 24 48000 28000 18 504000
2000 30000 22 660000
18000 24 432000
Enduing 96000 1896000
inventory

Weighted average

Purchase sales balance

Date Units Rate Amoun Units Rate Amoun Units Rate Rs
t t
Beginnin 20000 15 300000
g
inventory
 1 Jan
Mar 7 28000 18 504000 48000 11 534000
mar 25 30000 22 660000 78000 15 1194000
Aug 1 20000 24 480000 98000 17 1674000
Nov 10 33000 27 891000 131000 19 25650000
(3500) 19 665000 96000 1824000
35000

6-5A

FIFO

Purchase sale balance

Date Units Rate Amount Units Rate Amount Units Rate Amounts
s
Jan 1 600 18 10800
Feb 16 1500 19 28500 600 18 10800
1500 19 28500
May 16 700 20 14000 600 18 10800
1500 19 28500
700 20 14000
Oct 3 400 21 8400 600 18 10800
1500 19 28500
700 20 14000
400 21 8400
Oct 11 3300 22 39600 600 18 10800
1500 19 28500
700 20 14000
400 21 8400
3300 22 39600
Dec 31 (5500)
600 18 10800
1500 19 28500
700 20 14000
400 21 8400 1000 22 22000
2300 22 50600
5500 112300 1000 22000

Income statement

Sale = 247500

(-)CGS = 112300

GP= 135200

(-) income statement 74250

(30%)

Net profit 60950

Weighted average

Purchase sales balance

Date Units rate Amount Units Rate amount Units Rate Amount
Jan 1 600 18 10800
Feb 16 1500 19 28500 2100 19 39300
May 16 700 20 14000 2800 19 533000
Oct 3 400 21 8400 3200 169 541400
Oct 11 3300 22 39600
Dec (5500) 89 489500 1000 89 89000
5500
489500 1000 89000

Income statement

Sale 247500

CGS 489500

GP 242000.

Income total 74250

N-L 316350

FIFO:

 Advantages:
 Fifo is easy to understand and operate
 Fifo method is useful where transaction are not voluminous and price of material are feeling.
 Fifo method is stable for built material with high unit price.
 Fifo method helps to avoid deterioration and obsolescence.

Disadvantages
 Fifo method is improper if money lots are purchased during the period at different price.
 Fifo method overstates profit especially in inflation.

LIFO
Advantages
 Under lifo method goods are issued at actual price in contract to weighted average method
where goods are issued at a calculated price.
 Under lifo issued are at the latest price as compared to fifo where gods are issued at old price.
 Under the method goods coming in last are the first one to get out so closing stock is measured.

Disadvantages:
 Lifo method does not seem at logical as fifo method
 Under lifo method closing stock is not measured at recent price at is done in lifo.