2 Financial Accounting: Please answer all questions. Please do it in Excel. Thank you very much.

Question 2

Question 3

Please answer in Excel. Thank you.

Part II. Big Fish Tackle Co. Ltd. reports the following inventory transactions for its fishing rods for the month of April. The company uses a perpetual inventory system. Instructions a. Using FIFO, determine the cost of goods sold and the cost of ending inventory. b. Record journal entries for the sales transactions on April 9 and April 20. Both sales were on credit. c. If the company does change to the average cost formula and prices continue to rise, explain whether you expect the cost of goods sold and ending inventory amounts to be higher or lower than these amounts when using FIFO. d. Determine the cost of goods sold and cost of ending inventory using average cost. (Use unrounded numbers in your calculations but round to the nearest cent for presentation purposes in your answer.) e. Continue to assume that the company uses average cost assumption. When the company counted its inventory at the end of April, it counted only 49 fishing rods on hand. Record the journal entry, if any, the company should prepare to record this shortage. f. If the company had not discovered this shortage, identify whether Inventory, COGS, and Retained Earnings would be overstated or understated and by what amount. Part III. You are a student intern at Island Milling Ltd. The bookkeeper has gathered all of the information necessary to complete Island Milling's bank reconciliation for October. She has asked you to complete it for her. Island Milling's general ledger showed a cash balance of $14,565 at October 31. The company's bank statement for the month of October showed that the company had a cash balance of $17,230 as at October 31 . A comparison of the bank statement and the accounting records revealed the following information: 1. Bank service charges and debit and credit card processing fees for the month were $65. 2. The cash receipts for October 31 amounted to $3,600 and had been deposited in the night deposit chute at the bank on the evening of October 31. These were not reflected on the bank statement for October. 3. During the last week of the month, one of Island Milling's customers made an electronic payment directly to Island Milling's bank in the amount of \$2,650. Because the customer had not notified Island Milling of the payment, the company was unaware of it until it received the bank statement for October. 4. Island Milling had written and mailed out cheques with a value of $6,200 that had not yet cleared the bank account. 5. A cheque for $2,610 from one of Island Milling's customers that had been deposited during the last week of October was returned with the bank statement as "NSF." 6. Cheque #1926, which was a payment for legal fees, had been correctly written for $3,670 but had been incorrectly recorded in the general ledger as $3,760. Instructions a. Prepare the bank reconciliation at October 31. b. Prepare any journal entries required from the reconciliation