On May 15, 19X2, you are engaged to make an audit of Boro Corporation, whose records you have not previously audited. Your client is a retail coal dealer with a fiscal year ending May 31. Perpetual inventory records are in use, and sales are accumulated as to both dollar amount and tonnage for each type of coal sold. A part of the coal on hand at May 31, 19X2 is stored in loading bins, while the remainder is piled in the open or contained in railroad cars.

1. List audit procedures to be followed in the tests of inventories at May 31, 19X2.

2. Assuming that no audit had been made at May 31, 19X1, suggest procedures to test the cost of goods sold figure.