Reference no: EM132670333

Question - FIFO, LIFO and average cost method in periodic inventory system

1. Angelo Plc uses a periodic inventory system. The beginning balance of inventory and purchases made by the company during the month of July, 2016 are given below:

July 1: Beginning inventory, 500 units @ $20 per unit.

July 18: Inventory purchased, 800 units @ $24 per unit.

July 25: Inventory purchased, 700 units @ $26 per unit.

The company sold 1,400 units during the month of July.

Required: Compute inventory on July 31, 2016 and cost of goods sold for the month of July using following inventory costing methods:

a. LIFO

b. FIFO

c. Average cost

2. On November 30, Brown Sugar Plc has the below information related to cheques and cash:

1. The bank balance as per the accounting records of the company amounts to $42,500 and the bank balance as per the bank statement amounts to $37,758.

2. Collected cash of $6,244 on November 30 will be transferred to the Bank on December 1.

3. In the Bank Statement there is a credit of $167 showed as interest earned for November.

4. There are two Outstanding Cheques N0 921 of amount $964 and N0 925 of amount $1,085.

5. In the Bank Statement there is a debit of $14 shown as Bank Service Charges, Non-Sufficient-Funds Cheque of Mr. Sweet with $700.

Required -

a. Make Bank reconciliation statement on November 30.

b. Prepare the necessary journal entries after the preparation of the Bank reconciliation.