2108AFE Financial Accounting
Assessable Homework Workshop Questions
Topic 3 – Inventory and Retail Operations
Question 1
ABC Ltd has the following information related to its inventory for December:
Date
Item
Quantity
Unit Cost
1st Decembe
Beginning Inventory
15
210
6th Decembe
Sale
12
9th December
Purchase
6
250
16th Decembe
Purchase
2
240
26th Decembe
Sale
10
30th Decembe
Purchase
14
255
ABC Ltd uses a perpetual inventory system with FIFO costing.
Required:
(a) Complete the following inventory record below.
Inventory Record.
Date
Purchases
Cost of Sales
Inventory on Hand
Quantity
Unit Cost
Total Cost
Quantity
Unit Cost
Total Cost
Quantity
Unit Cost
Total Cost
TOTAL
Question 2
Explain the “Lower of Cost and Net-Realisable-Value (LCM) Rule in 5 lines or less.
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Question 3
What would the general journal entries be to record the 26th December sale if the selling price is $341 per unit which includes 10% GST.
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Question 4 – Reflection (Minimum 100 words, Maximum 150 words)
What are some of the ethical issues associated with retail inventory? In your answer, explain the implications of these ethical issues on the financial statements?
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2108AFE Financial Accounting
Assessable Workshop Question(s)
Topic 4 – Accounting Information Systems
Question 1
Johnson Consulting *NOT REGISTERED FOR GST
Dec 2
Received $20,000 cash investment by Frank Johnson.
2
Paid monthly office rent, $550.
3
Paid cash for a MacBook computer, $1,900. This equipment is expected to remain in service for 5 years.
4
Purchased office furniture on credit, $4,200. The furniture should last for five years.
5
Purchased supplies on credit, $900.
9
Performed consulting service for a client on credit, $1,500.
12
Paid electricity and gas expense, $250.
18
Performed service for a client and received cash of $1,100.
Requirements:
1. Record the transactions in special journals.
2. Balance the special journals
Requirement 1
Sales journal
Date
Invoice
no.
Custome
account debited
Post.
ef.
Accounts receivable DR
Service revenue CR
Cash payments journal
Date
Check
no.
Account debited
Post.
ef.
Debits
Credits
Othe
accounts
Accounts
payable
Inventory
Cash
$ $ .
Cash receipts journal
Date
Debits
Credits
Cost of sales DR
Inventory CR
Cash
Sales
discounts
Service
evenue
Accounts
eceivable
Other accounts
Account
title
Post.
ef.
Amount
Total debits = $ ____ Total credits = $ _______
Purchases journal
Date
Credits
Debits
Supplie
account credited
Terms
Post.
ef.
Accounts
payable
Inventory
Supplies
Other accounts
Account
title
Post.
ef.
Amount
Total debits = $ ______ Total credits = $ ______
Question 2 ***INCLUDES GST
Casey Ltd’s accounting system uses special journals and subsidiary ledgers. The following transactions occu
ed during October 2019 (GST is ignored). All sales are n/30.
Required
Assuming that the company is registered for the GST, enter the appropriate transactions into suitably ruled purchases and sales journals, and explain how each would be posted to accounts in the ledgers.
Purchases Journal
Date
Date of Inv.
Account
Terms
Post Ref.
Purchases
GST Receivable
Accounts Payable
Sales Journal
Date
Inv. No.
Account
Terms
Post Ref.
Sales
GST Payable
Accounts Receivable
Postings explanation:
Purchases Journal:
Sales Journal:
3