I need to practice these questions for the test this will be great help if you solve it

thanks a lot

FA 1-MARK CASE STUDY: TOPIC 5 A CASE STUDY 5 - INVENTORIES While Paul has been busy organising his key assets and making sure the TVA is running the way he wants, Jim has decided to focus on the products sold by Energising Athletes Making the Leap. Jim as been looking into Paul's approach to recording inventory and has noticed it has been reasonably haphazard. Given Energising Athletes Making the Leap has only ever sold a few different items Paul appears to simply buy stock when he needs it and then occasionally counts what stock is on hand to see if he needs to buy more. Required 1 Given the information above, what type of inventory recording system does it appear Paul is using (sort of). Outline for Jim the two alternative recording systems and what Paul should be considering when choosing between them. FA 1 - MARK CASE STUDY: TOPIC 5 FA1-MARK CASE STUDY: TOPICS Jim thinks there is an opportunity to improve this system and give Paul better information about his stock movements but wants your assistance before talking to Paul. In order to show Paul how he could change things Jim has gathered the following information about two products Energising Athletes Making the Leap sells, Wrist Tape and a relative new product Paul's Ultimate Pole, and what has been bought and sold in the past month. Jim is quite confused with calculations you've done for the Wrist Tape and would like to keep things much simpler. He knows there is method where you simply assume you sell your old stock first and asked if you can use that method when doing any calculations for Paul's Ultimate Pole. Product 1 - Wrist Tape is a 2-metre-long role of tape used by jumpers to support their wrist and help grip the pole when jumping. Each roll of tape sells for $12 and a count at the start of June showed 30 rolls on hand with a total cost of $120. Product 2 - Paul's Ultimate Pole is a special designed Pole Vault pole that Paul has recently begun selling. Paul contributed to the design of the pole and is quite proud of the product but given its size 5 metres long and cost, each pole sells for $650 dollars, he only keeps a few poles on hand. At the start of June Paul only had 2 poles in stock at a cost of $250 each. Date Purchases Sales 2 poles 4 poles @ $250 1 pole Date June 6 8 10 17 21 25 26 2 poles @ $260 3 poles Purchases Sales June 2 40 rolls @ $4.10 per roll 20 rolls 50 rolls @ $4.00 per roll 11 30 rolls 15 15 rolls 17 Customer returned 5 rolls as they over ordered 19 60 rolls @ $4.05 23 10 rolls 26 40 rolls 28 Returned 10 rolls to supplier that were purchased on June 7 due to a manufacturing fault 29 25 rolls 30 30 rolls @ $2.10 (Paul was able to purchase these cheaply as the supplier was holding a stock take sale) A stocktake on June 30 revealed Paul had 60 rolls of Wrist Tape on hand 4 poles @ $242 Returned 2 poles purchased on June 25 as they were damaged when being delivered. 29 1 pole stock A stocktake on June 30 revealed Paul had 3 pole Required 3 Calculate the COGS and Gross Profit for the Paul's Ultimate Pole using a periodic recording system and the FIFO valuation method Required 2 Calculate the COGS and Gross Profit for the Wrist Tape assuming Paul uses a periodic recording system and values the tape using weighted average cost. FAI-MARK CASE STUDY: TOPIC FA1-MARK CASE SIUDY: TOPIC + Product 2 - Paul's Ultimate Poles - Average Cost Date Purchases (In) Sales (Out) Balance Jim has taken what you have done and shown it to Paul who was initially impressed. However, in looking at the information Paul has decided he'd like to have much more up to date information about his stock and what it is worth While he appreciates your hard work so far, Paul has asked you to re-record the inventory information above in stock cards using a perpetual system. Paul has also suggested that the valuation systems Jim chose are the wrong way round and the Wrist Tape would be better done using FIFO with average cost used on Paul's Ultimate Poles. While you were busy preparing this report for Mark he has once again gone back to his somewhat incomplete notes from University and has managed to dig up the following comments. Required 4 Complete the stock cards provided below following Paul's requested methods Product 1 - Wrist Tape - FIFO Date Purchases (In) Sales (Out) Balance Jim thinks completing these stock cards seems like a lot of extra work and will actually give you inconsistent results. To prove his point Jim has asked you to recalculate the COGS and Gross Profit figures for the Wrist Tape using the information from the stock card. Required 5 Calculate the COGS and Gross Profit for the Wrist Tape using the perpetual FIFO information you have recorded FA 1-MARK CASE STUDY: TOPIC 5 FA1-MARK CASE STUDY: TOPIC 5 Jim now convinced that stock cards are just designed to create extra work for accountants because you have not only calculated a different Gross Profit but have now also included a stock loss in your calculations. Paul was also surprised to find out about the stock loss as he has never lost any stock before. Paul was quite excited when he was able to purchase the last batch of Wrist Tape at a heavily discounted price. Unfortunately, he's now worked out that the reason his supplier was selling so cheaply that a new brand of tape has just been released which will be much more popular. As a result, the only way Paul will be able sell of his existing stock of Wrist Tape is in discounted bundles of 5 rolls. Paul will be able to sell each bundle for $16.50 but it will cost $1.50 to repackage the rolls as bundle ready to sell. Required 6 Required 7 Explain to Jim that it is not the recording system that has created the alternative Gross Profit figures but the valuation system, and this is in fact only a temporary variation as a result of timing differences. Point out to Paul that the stock loss was always there and explain why it couldn't be seen in the periodic system. Show the General Journal entry(s) (and any calculations) to record the impact of this information for both the periodic perpetual records for Wrist Tape. DATE PARTICULARS P/R DEBIT $ CREDIT $ FA 1-MARK CASE STUDY: TOPIC 5 A CASE STUDY 5 - INVENTORIES While Paul has been busy organising his key assets and making sure the TVA is running the way he wants, Jim has decided to focus on the products sold by Energising Athletes Making the Leap. Jim as been looking into Paul's approach to recording inventory and has noticed it has been reasonably haphazard. Given Energising Athletes Making the Leap has only ever sold a few different items Paul appears to simply buy stock when he needs it and then occasionally counts what stock is on hand to see if he needs to buy more. Required 1 Given the information above, what type of inventory recording system does it appear Paul is using (sort of). Outline for Jim the two alternative recording systems and what Paul should be considering when choosing between them. FA 1 - MARK CASE STUDY: TOPIC 5 FA1-MARK CASE STUDY: TOPICS Jim thinks there is an opportunity to improve this system and give Paul better information about his stock movements but wants your assistance before talking to Paul. In order to show Paul how he could change things Jim has gathered the following information about two products Energising Athletes Making the Leap sells, Wrist Tape and a relative new product Paul's Ultimate Pole, and what has been bought and sold in the past month. Jim is quite confused with calculations you've done for the Wrist Tape and would like to keep things much simpler. He knows there is method where you simply assume you sell your old stock first and asked if you can use that method when doing any calculations for Paul's Ultimate Pole. Product 1 - Wrist Tape is a 2-metre-long role of tape used by jumpers to support their wrist and help grip the pole when jumping. Each roll of tape sells for $12 and a count at the start of June showed 30 rolls on hand with a total cost of $120. Product 2 - Paul's Ultimate Pole is a special designed Pole Vault pole that Paul has recently begun selling. Paul contributed to the design of the pole and is quite proud of the product but given its size 5 metres long and cost, each pole sells for $650 dollars, he only keeps a few poles on hand. At the start of June Paul only had 2 poles in stock at a cost of $250 each. Date Purchases Sales 2 poles 4 poles @ $250 1 pole Date June 6 8 10 17 21 25 26 2 poles @ $260 3 poles Purchases Sales June 2 40 rolls @ $4.10 per roll 20 rolls 50 rolls @ $4.00 per roll 11 30 rolls 15 15 rolls 17 Customer returned 5 rolls as they over ordered 19 60 rolls @ $4.05 23 10 rolls 26 40 rolls 28 Returned 10 rolls to supplier that were purchased on June 7 due to a manufacturing fault 29 25 rolls 30 30 rolls @ $2.10 (Paul was able to purchase these cheaply as the supplier was holding a stock take sale) A stocktake on June 30 revealed Paul had 60 rolls of Wrist Tape on hand 4 poles @ $242 Returned 2 poles purchased on June 25 as they were damaged when being delivered. 29 1 pole stock A stocktake on June 30 revealed Paul had 3 pole Required 3 Calculate the COGS and Gross Profit for the Paul's Ultimate Pole using a periodic recording system and the FIFO valuation method Required 2 Calculate the COGS and Gross Profit for the Wrist Tape assuming Paul uses a periodic recording system and values the tape using weighted average cost. FAI-MARK CASE STUDY: TOPIC FA1-MARK CASE SIUDY: TOPIC + Product 2 - Paul's Ultimate Poles - Average Cost Date Purchases (In) Sales (Out) Balance Jim has taken what you have done and shown it to Paul who was initially impressed. However, in looking at the information Paul has decided he'd like to have much more up to date information about his stock and what it is worth While he appreciates your hard work so far, Paul has asked you to re-record the inventory information above in stock cards using a perpetual system. Paul has also suggested that the valuation systems Jim chose are the wrong way round and the Wrist Tape would be better done using FIFO with average cost used on Paul's Ultimate Poles. While you were busy preparing this report for Mark he has once again gone back to his somewhat incomplete notes from University and has managed to dig up the following comments. Required 4 Complete the stock cards provided below following Paul's requested methods Product 1 - Wrist Tape - FIFO Date Purchases (In) Sales (Out) Balance Jim thinks completing these stock cards seems like a lot of extra work and will actually give you inconsistent results. To prove his point Jim has asked you to recalculate the COGS and Gross Profit figures for the Wrist Tape using the information from the stock card. Required 5 Calculate the COGS and Gross Profit for the Wrist Tape using the perpetual FIFO information you have recorded FA 1-MARK CASE STUDY: TOPIC 5 FA1-MARK CASE STUDY: TOPIC 5 Jim now convinced that stock cards are just designed to create extra work for accountants because you have not only calculated a different Gross Profit but have now also included a stock loss in your calculations. Paul was also surprised to find out about the stock loss as he has never lost any stock before. Paul was quite excited when he was able to purchase the last batch of Wrist Tape at a heavily discounted price. Unfortunately, he's now worked out that the reason his supplier was selling so cheaply that a new brand of tape has just been released which will be much more popular. As a result, the only way Paul will be able sell of his existing stock of Wrist Tape is in discounted bundles of 5 rolls. Paul will be able to sell each bundle for $16.50 but it will cost $1.50 to repackage the rolls as bundle ready to sell. Required 6 Required 7 Explain to Jim that it is not the recording system that has created the alternative Gross Profit figures but the valuation system, and this is in fact only a temporary variation as a result of timing differences. Point out to Paul that the stock loss was always there and explain why it couldn't be seen in the periodic system. Show the General Journal entry(s) (and any calculations) to record the impact of this information for both the periodic perpetual records for Wrist Tape. DATE PARTICULARS P/R DEBIT $ CREDIT $