Part A Beyer Ltd balances its accounts at month‐end, uses special journals, and uses the perpetual inventory system with the FIFO cost flow assumption. All purchases and sales of inventory are made on credit. End of the reporting period is 30 June. Ignore GST. Sales and purchases of product JINX‐87 in May 2019 were as follows.

Required

(a) For product JINX‐87, calculate May 2019’s cost of sales and the cost of inventory on hand at 31 May 2019, using an inventory record.

Part B The inventory ledger account balance at 30 June 2019 was $7650, and net realisable value for each product line exceeded cost. The cost of inventory on hand at 30 June 2019 determined by physical count, however, was only $7578. In investigating the reasons for the discrepancy, Beyer Ltd discovered the following.

• Goods costing $87 were sold for $100 on 26 June 2019 on DDP shipping terms. The goods were in transit at 30 June 2019. The sale was recorded on 26 June 2019 and the goods were not included in the physical count.

• Goods costing $90 were ordered on 24 June 2019 on EXW shipping terms. The goods were delivered to the transport company on 27 June 2019. The purchase was recorded on 27 June 2019 but, as the goods had not yet arrived, the goods were not included in the physical count.

• Goods costing $140 held on consignment for Richmond Ltd were included in the physical count.

Required

(a) Prepare any journal entries required on 30 June 2019 to correct error(s) and to adjust the inventory account. (Use the general journal.)

Transcribed Image Text:

Date May 1 7 11 17 21 24 29 Transaction Inventory on hand Purchase Sale @ $35/unit Purchase Purchase return Sale @ $36/unit Sale return (on 24 May sale) 282888 No. Unit cost 50 $10 20 $11 54 30 $12 10 $11 30