Week 9

Tamworth Trading Ltd is a company operating in the retail sector. The beginning inventory of Product EF5089 and information about purchases and sales made during June are shown below.

Units

Unit price $

June

1

Inventory

6,100

2.20

4

Purchases

4,600

2.25

9

Sales

4,100

12

Purchases

4,100

2.40

21

Sales

6,000

26

Purchases

3,100

2.50

Tamworth Trading Ltd uses the perpetual inventory system, and all purchases and sales are on credit. Selling price is $5 per unit. A stocktake on 30 June revealed 7,700 units in inventory. Ignore GST.

Required:

a) Using the FIFO method, prepare an appropriate inventory record for Product EF5089 for June. (8 marks)

b) Prepare an income statement down to the gross profit for Tamworth Trading Ltd for June. (2 marks)