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1) Given the following information, how much would the cost of goods sold be? Sales RM8
1) Given the following information, how much would the cost of goods sold be? Sales RM8.200; Opening inventory RM1,300; Closing Inventory RM900; Purchases RM6,400; Carriage inwards RM200.
Select one:
a. 7,000
b. Another figure.
C. 6,800.
d. 6,200
2) A firm bought a machine for RM3,200. It is to be depreciated at a rate of 25 per cent using the Reducing Balance Method. What would be the remaining book value after 2 years?
Select one:
a. RM 1,600
b. RM2,400.
C. RM1,800
d. Some other figure.
Expert Solution
Answer:
1) Cost of goods sold is calculated as follows:
| RM | |
|---|---|
| Opening Inventory (A) | 1,300 |
| Purchases (B) | 6,400 |
| Carried Inventory (C) | 200 |
| Closing Inventory (D) | (900) |
| Cost of goods sold (A + B + C - D) | RM 7,000 |
So correct answer is option (a) or RM 7,000
2) The remaining book value, after 2 years by using the reducing balance method is calculated as follows:
| Year | RM | |
|---|---|---|
| 1 | Cost | 3,200 |
| Less: Depreciation 25% (3,200 *25% ) | (800) | |
| Book Value | 2,400 | |
| 2 | Less: Depreciation 25% (2,400 *25% ) | (600) |
| Book Value | RM 1,800 |
So correct answer is option (c) or RM 1,800
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