Accounting

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In-class task #3

  1. Interocean Shipping uses the perpetual inventory system. The following transactions took place during January 2021.

 

Date   Units Unit Cost
Jan. 1 Opening Inventory 100 $1
7 Purchase #1 10 $2
9 Sale #1 80  
21 Purchase #2 20 $3
24 Sale #2 40  

 

 

 

 

Required: Using the table below, calculate cost of goods sold for the January 9 and 24 sales, and ending inventory using the FIFO inventory costing method.

 

Purchases Cost of Goods Sold Inventory on Hand (Balance)
  Date  

Units

 Unit Cost   Total Cost     Units Unit Cost Total Cost        Units   Unit   Cost   Total Cost
Jan.

1

 Opening Inventory                         100 x $1 = $100
 7 Purchase #1                                  
 9 Sale #1                                  
21 Purchase #2                                  
24 Sale #2

 

 

 

 

 

  1. Prepare a bank reconciliation on December 31, 2021, for Fitzpatrick Co. Ltd.

Balance per bank statement, 12/31/2021                         $129,000

Balance shown per books, 12/31/2021                              $114,920

An analysis of the cancelled cheques revealed the following:

(i) Outstanding cheques of $5,000 for November were still outstanding on December 31;

(ii) $16,800 of cheques written during December were outstanding by the end of the month; and

(iii) an $800 cheque for Fitzgerald Co. had been charged against the Fitzpatrick Co. account in error by the bank.

 

Fitzpatrick Co. Ltd. had placed $10,200 in the night deposit box of the bank on December 31 and had not received credit on the December bank statement.  This was a deposit in transit.

 

An analysis of the cash receipts journal revealed a $180 error in the deposit of December 20. Fitzpatrick Co. Ltd. recorded it as $3,360, and the correct amount shown on the bank statement was $3,540. The error related to the cheque from the customer YT on payment to Fitzpatrick.

 

The December bank statement also included several memorandum items:

(1) The first was a credit memorandum for the note of TS Limited collected by the bank for Fitzpatrick on December 28 for $3,600 plus $36 in interest.

(2) The second item was a $16 debit memorandum for the December bank service charge.

(3) The last item was also a debit memorandum. A cheque from M.O.P. for $520 received and deposited by Fitzpatrick Co. during December was returned with the statement marked nonsufficient funds (NSF cheque).