GRADING:
Computations
40 marks
Understanding
4 marks
Procedures/Algorithm
4 marks
Presentation
2 marks
Total
50 marks
Classique Designs sells a variety of merchandise, including school shoes for girls. The
business began the last quarter of 2013 with 30 pairs of the “Aerosoles” brand at a total cost
of $54,000.
The following transactions, relating to the “Aerosoles” brand were completed during the
quarter:
October 3
Purchased 45 pairs of shoes at a cost of $1,900 each.
October 15
Sold 55 pairs to Casually Elegant Ltd at a unit price of $2,780
October 26
Purchased 70 pairs at a cost of $2,400 each but these were subject to a trade
discount of 5%.
November 10
Sold 60 pairs to Best City Store which yielded total sales revenue of
$192,000.
November 14
Owing to an increased demand for this brand, the manager of Clasique
purchased 80 additional pairs of the “Aerosole” brand at a unit cost of
$2,500, but additionally there was freight charge of $100 on each pair.
November 24
Sold 60 pairs of shoes to Big Buy Company at a price of $3,600 each.
November 30
A physical stock count on that date revealed that there were 42 pairs of the
“Aerosoles” brand in the warehouse.
December 4
Purchased 75 pairs of shoes at a total cost of $213,750.
December 15
5 pairs of the shoes purchased on December 4 were returned to the supplier
as they were of the wrong description.
December 30
Sold 70 pairs to Regal Ltd. at a unit selling price of $4,400.
All purchases were on account and received on the dates stated and Classique Designs uses
the FIFO method to account for inventory.
Required:
i)
Prepare a perpetual inventory record for Classique Designs, to determine the
value of ending inventory at December 31, 2013, and the total amount to be assigned to
cost of goods sold for the period.
(22 marks)
ii)
Given that selling, distribution and administrative costs for the...