Task 3

the completed stock card of a firm using FIFO method of inventory pricing and a perpetual inventory system disclosed

Date Detail Purchase Cost of Goods sold Balance

Qty Unit cost $ Total Cost Qty Unit cost $ Total Cost Qty Unit cost $ Total Cost

1/7/2018 Opening Balance 60 9.00 540.00

5/7/2018 Purchases 80 8.00 640 60 9.00 540.00

80 8.00 640.00

140 1180.00

13/7/2018 Sales 48 9.00 432.00 12 9.00 108.00

80 8.00 640.00

92 748.00

19/7/2018 Purchases 60 9.00 540 12 9.00 108.00

80 8.00 640.00

60 9.00 540.00

152 1288.00

23/7/2018 Sales 12 9.00 96.00

80 8.00 680.00

4 9.00 36.00 56 9.00 504.00

29/7/2018 Sales 32 9.00 288.00 24 9.00 216.00

31/7/2018 Stock Take Variance 4 9.00 36.00 20 9.00 180.00

Total cost of Good sols (Including stock variance ) 1,568.00

Required

a) The general journal entries to record the stock take variance on the 31st July

b) The General journal entries to record

sales for cash for the month assuming a unit selling price of $25 inc GSR

Cost of goods sold ( Narration not required)

Narration not required

c) A profit and loss statement for the month assuming total sales were as per (ii) above and operating expenses were $850

d) under a perpetual inventory system explain why a stock take is necessary as a part of the reconciliation process

e) Identify two reasons for discrepancies / variances between inventory general ledger figures and stock on hand figures

f) What procedure should be followed to adjust for variance

Task 4

Ethan's Hardware LTD uses perpetual inventory method to record their stock of garden ranks . transactions for the period are set out below

Date Transaction Kilograms Price per Kilograms

1st August 2018 Opening Balance 350 $15.00

4th August 2018 Purchase 300 $13.50

8th August 2018 Sale 250 $18.00

11th August 2018 Purchase return (from 4/8/18) 70

18th August 2018 Sale 210 $18.00

20th August 2018 Sale return (from 18/8/18) 60

25th August 2018 Purchase 190 $13.20

31st August 2018 Stock on hand 400

Required

a) record the information on the stock ledger card using the FIFO method

b) record the information on the stock ledger card using the weight average cost method