Bonnie Sandini (Bonnie) owns a computer retail business. She has recently discovered some inconsistencies in the stock of computers in her warehouse and suspects one of her sales associates of theft. Bonnie operates a manual inventory check system in her retail business. Unfortunately, due to how shifts are scheduled, it is often the same associate who sells computers that takes inventory. Due to resource constraints, inventory discrepancies are not noted until the end of each month when a count is done. During June 2022 Bonnie's transactions were as follows: Additional Notes - On 30 June 2022 no trading took place. An inventory check revealed that Bonnie had closing stock of 250 televisions in her company's warehouse. Required: (a) Record the above information using each of the following inventory cost flow assumptions: (i) first in, first out (FIFO); (ii) last in, first out (LIFO), and (iii) average cost (AVCO) (15 marks) (b) Using the data from each of the three methods above, prepare extracts of Bonnie's statement of profit and loss for June 2022 ( 8 marks) (c) Bonnie is seeking your professional advice in explaining the differences between these methods and the impact they have on profitability. Additionally, Bonnie requires some guidance on how to improve the company's controls through sound inventory management systems. Provide Bonnie with a short report on each issue. (17 marks) Total: 40 marks Bonnie Sandini (Bonnie) owns a computer retail business. She has recently discovered some inconsistencies in the stock of computers in her warehouse and suspects one of her sales associates of theft. Bonnie operates a manual inventory check system in her retail business. Unfortunately, due to how shifts are scheduled, it is often the same associate who sells computers that takes inventory. Due to resource constraints, inventory discrepancies are not noted until the end of each month when a count is done. During June 2022 Bonnie's transactions were as follows: Additional Notes - On 30 June 2022 no trading took place. An inventory check revealed that Bonnie had closing stock of 250 televisions in her company's warehouse. Required: (a) Record the above information using each of the following inventory cost flow assumptions: (i) first in, first out (FIFO); (ii) last in, first out (LIFO), and (iii) average cost (AVCO) (15 marks) (b) Using the data from each of the three methods above, prepare extracts of Bonnie's statement of profit and loss for June 2022 ( 8 marks) (c) Bonnie is seeking your professional advice in explaining the differences between these methods and the impact they have on profitability. Additionally, Bonnie requires some guidance on how to improve the company's controls through sound inventory management systems. Provide Bonnie with a short report on each issue. (17 marks) Total: 40 marks
