(A3Q2,3) Part A Vasquez Paper Company has provided you with the following information regarding its inventory of paper for June and July. Vasquez uses a perpetual inventory system.

	June 30	July 31
Paper Inventory (in tonnes)	4,500	6,200
Cost per tonne	$560	$680
NRV per tonne	$650	$615

Instructions

1. Calculate the cost, the net realizable value, and the amount to be reported on the balance sheet for Vasquezs inventory at (1) June 30 and (2) July 31.

2 Prepare any journal entries required to record the LCNRV of the paper inventory at (1) June 30 and (2) July 31.

3 Assume that during the month of August, the company did not purchase any additional paper inventory. Assume also that on August 31 it had 5,000 tonnes in inventory and the NRV per tonne was $720. Is an adjusting entry required at August 31? Explain. If so, prepare the adjusting entry.

4 What is Vasquez required to disclose in its notes to the financial statements with regard to LCNRV?

5 Why is it important to report inventory at LCNRV on the balance sheet?

Part B

The following errors were found when the controller at Country Lane Company was doing the July 31 bank reconciliation.

On July 9, Country Lane recorded a deposit as $2,050. The correct amount was $5,020. The deposit was for the collection of an account receivable and the bank recorded it correctly.

On July 14, Country Lane recorded a payment on account as $1, 600. The correct amount was $1,060. It was correctly recorded by the bank.

On July 16, Country Lane recorded a payment for the purchase of supplies as $360. The correct amount was $630. It was correctly recorded by the bank.

On July 22, the bank recorded a deposit as $940. The correct amount was $490. The error was corrected by the bank on July 23. Country Lane had correctly recorded the deposit.

On July 25, Country Lane recorded a deposit as $670. The correct amount was $760. The deposit was for the collection of an account receivable. The deposit was correctly recorded by the bank on July 28.

On July 31, the bank debited Country Lanes account $200 for a cheque written by another company, Country Land, because the account number on the cheque had been damaged. The bank employee who looked up the account number made a mistake.

Instructions

1. Describe the impact of each of these items on the bank reconciliation.

2. Prepare any entries that Country Lane will need to record.