QUESTION TWO (17 MARKS) Kummon Sales has commenced a business supplying scientific calculators to Universities. All purchases and sales of calculators are on credit. Kummon Sales uses a perpetual inventory recording system. (No VAT involved) Required: 1. 2. Prepare General Journal entries to record the transactions, using a Moving Average for stock movements and if necessary show the entry for any stock loss or gain for the period. (No narration required). (8 Marks) Prepare an extract of Income Statement up to the gross profit stage, for the week ended 7th June 2019 using First-in-First Out for the movement of stock. (5 Marks) Explain to Kummon Sales the advantages of a Perpetual Inventory System, and the available options for accounting for the movement of stock, within IFRS, (2 Marks) On 10th June 2019 an independent professional assessed the value of the calculators at $220.00 each. Show the General Journal entry required to account for the decrease in the inventory valuation. (No narration required). (2 Karks) 3. 4. Transactions June 1st 2019 Purchase the first 200 calculators at $240 each and paid freight of $200. June 2nd Sold 100 calculators at $600 each - this sales price will remain constant for the week. June 3rd Customer returned 10 calculators. June 3rd Purchased 100 calculators at $252.60 each and paid freight of $200. June 4th Sold 70 calculators. June 5th Sold 25 calculators. June 6th Purchased 100 calculators at $254.60 each, paid freight of $200. June 7th The stock-take revealed 210 calculators suitable for sale. QUESTION TWO (17 MARKS) Kummon Sales has commenced a business supplying scientific calculators to Universities. All purchases and sales of calculators are on credit. Kummon Sales uses a perpetual inventory recording system. (No VAT involved) Required: 1. 2. Prepare General Journal entries to record the transactions, using a Moving Average for stock movements and if necessary show the entry for any stock loss or gain for the period. (No narration required). (8 Marks) Prepare an extract of Income Statement up to the gross profit stage, for the week ended 7th June 2019 using First-in-First Out for the movement of stock. (5 Marks) Explain to Kummon Sales the advantages of a Perpetual Inventory System, and the available options for accounting for the movement of stock, within IFRS, (2 Marks) On 10th June 2019 an independent professional assessed the value of the calculators at $220.00 each. Show the General Journal entry required to account for the decrease in the inventory valuation. (No narration required). (2 Karks) 3. 4. Transactions June 1st 2019 Purchase the first 200 calculators at $240 each and paid freight of $200. June 2nd Sold 100 calculators at $600 each - this sales price will remain constant for the week. June 3rd Customer returned 10 calculators. June 3rd Purchased 100 calculators at $252.60 each and paid freight of $200. June 4th Sold 70 calculators. June 5th Sold 25 calculators. June 6th Purchased 100 calculators at $254.60 each, paid freight of $200. June 7th The stock-take revealed 210 calculators suitable for sale
