Question 6:

Details of Emu Oil for the month of July were as follows:

July 2 Balance on hand 50 litres @ $12.00 per litre

3 Purchased 100 litres @ $12.40 per litre

10 Issued 80 litres to production

14 Returned 20 litres to the supplier (purchased on 3 July)

19 Purchased 100 litres @ $12.20 per litre

22 Issued 120 litres to production

30 20 litres of excess material returned to the store from production (part of the issue on 22 July)

Required: (Use the Template given in Moodle)

a. Using a perpetual inventory system, prepare materials ledger card using FIFO method.

b. Prepare general journal entry to record the total issues to the production under FIFO.

C. Prepare general journal entry to record the return of materials to the supplier on 14 July.

d. Prepare general journal entry to record the return of materials to the store on 30 July.

e. A physical stock take at 31 July shows 45 litres of oil on hand. Prepare general journal entry to adjust stock records to the physical stock take amount.