Please answer Question No. 2 and no copy paste please

Question 1 (10 marks)

Retail operations and retail inventory

Spottie Ltd began business on 1 January 2018. The business will sell Spot the dog soft toys via an online store. The business is not registered for GST. The following transactions occurred during January 2018:

Date:	Details:
1 Jan	Spottie Ltd issued 10,000 x $2 shares to Mr Spot and Mrs Spot. $20,000 received from the share issue was deposited into the business bank account.
3 Jan	Inventory purchase (400 soft toys) from Plush Toys Ltd on account for $2,400 on terms of n/30.
6 Jan	Sale of inventory (160 soft toys) to Rainbow Preschool on account for $1,600 on terms of n/30.
9 Jan	Inventory purchase (300 soft toys) from Plush Toys Ltd via EFT for $2,100.
12 Jan	Paid Plush Toys Ltd for purchases made on 3 January, via EFT.
15 Jan	Received $1,600 from Rainbow Preschool in payment of their account.
20 Jan	Sale of inventory (200 soft toys) to Sydney Childrens Hospital for $2,000 on terms of n/30.
22 Jan	Inventory purchase (150 soft toys) from Plush Toys Ltd on account for $1,050 on terms of 2/10, n/30.
24 Jan	Paid Plush Toys Ltd for purchases made on 22 January, via EFT.
25 Jan	Sale of inventory (200 soft toys) for $2,400 to online customers, with customers paying via EFT.
31 Jan	Mr & Mrs Spot completed a stocktake, and the number of soft toys on hand was 290.

Required:

i) Mr and Mrs Spot have heard of the two inventory methods periodic and perpetual methods, and they have also heard of the terms First-in-first-out and Weighted average cost, but dont really know anything more about them. Prepare a memo to Mr and Mrs Spot explaining each of these methods/terms.

ii) After Mr and Mrs Spot received your memo above, they both agree that the First-in-first-out method suits their business. They are still undecided about which inventory method should be used (either the perpetual or periodic methods), and have asked you to prepare journal entries for all of the companys transactions for January using the two different methods (using the First-in-first-out basis), so that they can see how the journal entries differ. Show workings where necessary.

Question 2 (10 marks)

Retail operations

This question continues on from question 1 above.

It is now January 2019, and Mr and Mrs Spot have been very busy growing the business of Spottie Ltd over the last year. The business now stocks 20 inventory lines, and employs three full-time staff.

After using a manual accounting system in Excel for Spottie Ltds business, Mr and Mrs Spot have come to you for advice as they consider moving to a computerised accounting system. They believe that they have been spending too much time preparing the accounting records, and a friend recommended that they make the move to Xero an online accounting system.

Undertake some research into cloud-based accounting systems, and the Xero cloud-based accounting system.

Required:

Prepare a business report (for the directors of Spottie Ltd) on cloud-based accounting systems (explaining what they are and how they work), and the suitability of the Xero cloud-based accounting system to Spottie Ltds business. In your discussion, explain how a computerised system like Xero can help the business track and account for inventory. Also highlight three other useful features of Xero that will be beneficial to Mr and Mrs Spot as they seek to save time preparing their accounting records, and monitor and grow their business further.

Note: You must reference using the APA referencing format, and include a reference list at the end of your report.

(Word count: 1000-1500 words)