Q1.

Q2.

Gracious Berhad's year end is 30 June 2019 and the following has been extracted from the company's Trial Balance as shown below: Dr Cr Insurance Expense 2,400 Prepaid Rent 3,600 Wages Expense 1,500 Unearned Income 2,500 a) Gracious Berhad purchased one-year insurance policy on 1 May 2019 for RM2,400. b) The company signed a rental agreement to rent a shop at KL Tower. Two years' rental agreement was signed and paid for on 1 April 2019. c) Wages owing to employees not recorded as at 30 June 2019 were RM3,000. d) Unearned income represents goods to be delivered by Gracious Berhad to a customer during June and July 2019. As at 30 June 2019, RM1,200 of the goods had been delivered to the customer with the balance to be delivered in July 2019. Required: 1. Provide the necessary general journals for the adjusting entries. 2. Assume that Gracious Berhad's unadjusted profit before tax for year ended 30 June 2019 was RM150,000. Determine the adjusted net profit before tax of Gracious Berhad for year ended 30 June 2019. Assume that JR Tyre Store completed the following perpetual inventory transaction for a line of tires: Beginning inventory 16 tyres @ RM65 Purchase 10 tyres @ RM78 Sale 12 tyres @ RM90 Required: 1. Compute cost of goods sold and gross profit using FIFO. 2. Compute cost of goods sold and gross profit using LIFO. 3. Compute cost of goods sold and gross profit using average-cost (Round average cost per unit to the nearest cent and all other amounts to the nearest dollar). 4. Which method results in the largest gross profit and why? 5. Why is the use of LIFO in inventory valuation prohibited by the accounting standards