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Overview
        Welcome to part 2 of your test! This part will be testing the application and communication components! You will not need to use your own templates
when answering the FIFO and Average cost formula questions.
YOUR TASK: You will have 75 minutes to complete five questions:
(Q1) Inventory Valuation (LCNRV)
(Q2,Q3) FIFO and Average cost formulas under the perpetual inventory system with journal entries
(Q4,Q5) FIFO and Average cost formulas under the periodic inventory system with journal entries
When completed, please submit this back into the Google Assignments folder.
Please remember to double check your work before submitting your work!
1. Inventory Valuation
        Used Motorcycles Inc. uses a perpetual inventory system and has the following inventory of motorcycles:
            Quantity    Cost        Net Realizable Value (NRV)        /5 app marks
        Model A    20    $750        $775        /2 comm marks
        Model B    25    $1,000        $880
        Model C    20    $850        $950
        Model D    15    $1,200        $1,000
    INSTRUCTIONS:    (a) Determine the lower of cost and net realizable value of the ending inventory AND state what amount of inventory
        Used Motorcycles Inc. should report on its balance sheet.
        (b) Prepare the journal entry required to record the adjustment from cost to net realizable value.
        Use the space below to answer this question.
    (a)
    Used Motorcycles Should record the inventory at lower of following
    a) Cost
    b) Net Realizable Value
        Quantity    Cost    Net Realizable
Value (NRV)    Inventory Value at Cost    Inventory Value
at NRV    Lowest of Cost and NRV
    Model A    20    $750    $775    $15,000    $15,500    $15,000
    Model B    25    $1,000    $880    $25,000    $22,000    $22,000
    Model C    20    $850    $950    $17,000    $19,000    $17,000
    Model D    15    $1,200    $1,000    $18,000    $15,000    $15,000
    Total                $75,000    $71,500    $69,000
    Thus, Amount of Inventory to be reported in Balance Sheet is $69,000
    (b)
    Journal entry to record the adjustment from cost to net realizable value
    General Journal
        Date    Particulars    Debit    Credit
    1        Cost of Goods Sold    $6,000        1
    2         Merchandise Inventory        $6,000    2
2. FIFO - Perpetual
    There are two tasks for this question                            Purchases            Cost of Goods Sold            Balance
    Frenzy Frisbees sells a wide variety of frisbees and uses a perpetual inventory system. During June,
the company had the following purchases and sales for their frisbees.                        Date    Units    Cost    Total    Units    Cost    Total    Units    Cost    Total
                            June 1                            10    $120    $1200        Check your work:
                            June 8    40    $125    $5000                10
40    $120
$125     $1200
$5000        Beginning Inventory + Purchases - Ending cost of goods sold = Ending inventory for the month
                            June 12                10
10    $120
$125    $1200
$1250    30    $125    $3750        $1200+ $11500- $4950=...