30 Ignore VAT, unless otherwise indicated (46 marks: 55 minutes) JHC Stores is a business that buys and resells children's toys and operates in Woodstock. The business's most popular items are "Hello Kitty" dolls, "Ben 10" figures and "Dinosaur Fossil Finding kits. JHC Stores has a reporting date of 30 June 2020. Additional information about "Hello Kitty" dolls JHC Stores ordered a batch of "Hello Kitty" dolls from its supplier on 2 June 2020. The batch consisted of 150 dolls, at a purchase price of R57 each. The order was shipped (FOB shipping point) by the supplier on 15 June 2020, and arrived at the warehouse of JHC Stores on 19 June 2020. The supplier was paid on 31 July 2013. The following costs relating to the "Hello Kitty dolls were incurred: Delivery cost (total) R450 Import duties (total) R210 Wages - unpacking of inventory 6 hours @ R25 each Advertising R600 Additional information about "Ben 10" figures The following transactions relating to the "Ben 10" figures, occurred for the month of June 2020: Date Transaction Units Amount per unit 1 June Opening balance 60 R48.90 5 June Purchase 50 R51.20 12 June Sale - credit 95 R108.60 15 June Purchase 150 R55.40 22 June Purchase 75 R59.60 28 June Sale - cash 180 R119.70 A physical inventory count was performed on 30 June, and it was found that 57 "Ben 10" figures were on hand. Of these, 15 figures were found to have broken legs, and could be sold at a price of R49 each if R5 per figure is spent on repairing them. Additional information about "Dinosaur Fossil Finding" kits The "Dinosaur Fossil Finding" kits are purchased based on specific orders received from customers, and each fossil kit is unique. Therefore the specific cost allocation method is used to measure these items. On 18 June 2020 a customer ordered a Tyrannosaurus Rex fossil kit. On 20 June 2020, JHC Stores purchased the kit for R253 on credit from the supplier. On 25 June 2020 the kit was sold on credit to the customer for R455.40. You are required to: Refer to the additional information about "Hello Kitty" dolls 1. Assume a periodic recording system and the FIFO cost allocation method 1.1. Identify when the "Hello Kitty" dolls ordered on 2 June 2020 should be recorded as inventory in the books of JHC Stores. Briefly justify your answer. (3 marks) 1.2. Calculate the cost per unit at which the "Hello Kitty" dolls ordered on 2 June 2020 should initially be recorded at in the books of JHC Stores. Include reasons for including or excluding each element of the cost. (7 marks) 1.3. If JHC Stores was a VAT vendor and the purchase price per unit of R57 was VAT inclusive, briefly explain whether or not the cost at which the inventory would be initially measured would differ to the answer provided in 1.2 above. Refer to the additional information about "Ben 10" figures PART A and PART B of this section are independent questions (2 marks) (A) Assume a periodic recording system and the weighted average cost allocation method 2. Calculate the amount at which the "Ben 10" figures will be reported in the statement of financial position of JHC Stores at 30 June 2020. Round off your answers to the nearest cent. (7 marks) 3. Prepare the cost of sales expense account as it would appear in the general ledger of JHC Stores relating to the "Ben 10" figures for the month of June 2020. (6 marks) (B) Assume a perpetual recording system and the FIFO cost allocation method 4. Prepare any adjusting journal entries that would be processed by JHC Stores at 30 June 2020 with respect to the "Ben 10" figures. Ignore dates and narrations (7 marks)