Phoenix Ltds 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 August 2021 and all purchases during the month. Ignore GST. Units Total cost ($) 1/8 Beginning inventory 850 17,000 10/8 Purchase 1000 20,500 20/8 Purchase 950 19,950 25/8 Purchase 810 17,820 Totals 3,610 $75,270 A physical count at the end of the month verified that 1,020 scarfs were on hand. Required:

A. Determine the cost of the ending inventory and the cost of sales for the month of August, using the Average Costing method. (2 marks)

B. Assume that on 5 August, inventory was sold for $1,500 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 August? (2 marks)

C. Explain how the entries in requirement B would differ if the entity had used the perpetual inventory system? (2 marks)

D. Assume that the perpetual inventory system is used, the entitys inventory records show that 1,100 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 businesss operations? (2 marks)