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QUESTION 2

Syarikat Layang uses the FIFO (First-in, First-out) costing method for its perpetual inventory system. It had inventory on 1 July 2022 consisting of 400 articles bought at RM4 each. Its purchase during the month of July consisted of 800 at RM4.20 each purchased on 8 July, and 2,000 at RM3.80 each on 18 July. It sold 2,400 at RM5.00 each on 28 July. 40 of those purchased on 8 July were returned by the customer in perfect condition on 31 July.

Required: Show the trading account for the month ended 31 July 2022 by means of an inventory account.

QUESTION 3

The following extract from the cash book of Joan for the month of July shows the company's bank transactions:

The cheque issued to Halim in the month of June is unpresented.

The company's bank statement for the same period is as follows:

Required:

a. Foam a corrected cash book using the information given above.

b. Draw up a bank reconciliation statement.

c. Discuss the purpose of a bank reconciliation.