Part A (3 marks)

Silver Traders uses the periodic inventory method and had the following inventory information available in January:

		Units	Unit cost
1/1	Beginning inventory	1 500	$4.00
10/1	Purchase	6 000	$4.40
20/1	Purchase	3 000	$4.20
25/1	Purchase	4 500	$4.80

A physical count of inventory on 31 January revealed that there were 5000 units on hand. Ignore GST.

Required:

Answer the following independent questions.

1) Assume that the company uses the FIFO method. The value of the ending inventory at 31 January is $__________. (1 mark)

2) Assume that the company uses the weighted average cost method. The value of the cost of sales on 31 January is $__________. (1 mark)

3) Assume that the company uses the LIFO method. The value of the cost of sales on 31 January is $__________. (1 mark)

Part B (8 marks)

Using the periodic inventory system, prepare general journal entries for the following selected transactions of Harlow Ltd in July. Ignore GST.

5 July	Purchased inventory from BestHouse in cash for $13 200 and on credit for $12 000, terms 3/10, n/30
10 July	Sold inventory to Crane Ltd for $51 000 on account, terms 2/10, n/30
11 July	Returned inventory for credit that was previously purchased from BestHouse for $1 500
12 July	Made payment to BestHouse
14 July	Crane Ltd returned faulty goods for $800 credit
17 July	Purchased two computers for the new administrators and paid $4 510 cash

Required:

1) Prepare the journal entries to record each of the above transactions in the accounting records of Harlow Ltd. (7 marks)

2) Prepare the journal to record the transaction on 17 July, assuming that $4 510 is GST inclusive. (1 mark)

(Narrations in the general journals are not required. Both account names and figures should be correct in order to award marks. Type your response directly into the template in the text box below.)