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# Assignment # 1 Financial Statement Analysis (FIN 621) Spring 2016 Due Date 19th July, 2016

SEMESTER SPRING 2016
FINANCIAL STATEMENT ANALYSIS (FIN621)
ASSIGNMENT NO. 01
DUE DATE: 19TH JULY, 2016 MARKS: 10

Learning Objective
 To understand stock valuation methods.
 To understand how different inventory valuation methods affect gross profit.
Learning Outcomes
After attempting this assignment, the students would be able to:
 Apply stock valuation methods in different practical scenarios.
 Analyze how different inventory valuation methods affect gross profit.
Assignment
ABCD manufacturing company provides semi-finished wooden parts to the furniture businesses. Following are the records of inventory from January to May.
 January: Opening inventory of 40 units at a cost of Rs. 3.00 each
 February: Bought 20 units at a cost of Rs. 3.60 each
 March: Sold 36 units for Rs. 6 each
 April: Bought 20 units at a cost of Rs. 3.75 each
 May: Sold 25 units for Rs. 6 each
Using the above given information you need to work out:
a) Inventory valuation under FIFO method (3 marks)
b) Inventory valuation under Average Cost (AVCO) methods (3 marks)
c) Gross Profit for the period using above mentioned two inventory valuation methods and answer whether; over the life of a business, total profit remains same or varies as the two inventory valuation methods shows? (3+1 marks)

IMPORTANT:
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IMPORTANT INSTRUCTIONS/ SOLUTION GUIDELINES/ SPECIAL INSTRUCTIONS
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REFERENCING GUIDELINES:
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### Replies to This Discussion

Plese discuss assginment

kindly someone plzzzzzzzzz at least try , and discuss important points and suggest  in bullets form so that we could finally reach a conculsion.....?????

Brother someone posted this solution  ... we can get a little idea & if there's any error in this working we can point out ..

Attachments:

Why they give selling price of issuing? should we ignore this? if not, then how we would calculate FIFO and AVCO? Because Balance amount would be by compiling receipts and issues. Right?

Because they asked to calculate Gross profit..........

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