Phoenix Ltd's sells silk scarfs. It uses the Periodic Inventory System and prepares financial statements at the end of each month. The following information is provided in relation to its inventory at the beginning of the month October 2021 and all purchases during the month. Ignore GST.

		Units	Total cost ($)
1/10	Beginning inventory	1020	20,400
10/10	Purchase	1200	24,600
20/10	Purchase	1140	23,940
25/10	Purchase	972	21,384
Totals		4,332	$90,324

A physical count at the end of the month verified that1,180 scarfs were on hand.

Required:

1. Determine thecost of the ending inventory and thecost of sales for the month of October, using the Average Costing method.
2. Assume that on 5 October, inventory was sold for $2,500 on credit. What would be the journal entry/entries to record the sales transaction? What would be the entry/entries to record the purchase of inventory on 10 October?
3. What would be the entries for the two transactions in requirement B if the business had used the perpetual inventory system?
4. Assume that theperpetual inventory system is used, the entity's inventory records show that 1,200 scarfs should be on hand. Given the physical count of inventory mentioned in the question is accurate, what accounting adjustment would be needed (assuming FIFO method is used) and what might the need for this adjustment indicate about the business's operations?