Department of Business Administration

Assignment

Course Title: Financial Accounting

Course code: ACN 501

Submitted to:
Prof. Dr. Ali Noor
Pro-Vice Chancellor (BUBT)

Submitted by:
Sumaya Nimat Khan
Registration no: 23206031
Program: Master of Business Administration

Date: 27 April 2024

(!) Cost of goods sold:

Sales 110*18 1980

50*20 1000
40*18 720
Total 3700
Less: Sales return 10*18 180
Net cost of goods sold 3520

Calculation of sales:

Sales 110*28 3080

90*32 2880
Total 5960
Less: Sales return 10*28 280
Net sales 5680

(!!!) Gross profit:

Net sales 5680

Less: Cost of goods sold 3520
Gross profit 2160
(!) Cost of goods sold:

Sales 100*15 1500

10*18 180
90*18 1620
Total 3300
Less: Sales return 10*18 180
Net cost of goods sold 3120

Calculation of sales:

Sales 110*28 3080

90*32 2880
Total 5960
Less: Sales return 10*28 280
Net sales 5680

(!!!) Gross profit:

Net sales 5680

Less: Cost of goods sold 3120
Gross profit 2560

Addition:

1. This period is inflationary because the price is decreasing.

2. During the inflationary period, company should follow LIFO method, as it will charge
more costs against sales and its shows less profit.
3. (!) If a company wants to show more profit, then they should follow the FIFO
method.

(!!) If a company wants to pay less tax, then they should follow LIFO method.

(!!!) If a company wants to sell shares in the market, then they should follow the FIFO
method because it shows more profit.

(!v) If a company wants to purchase share from the market, they should follow both LIFO
and FIFO methods.