Q1. Come up with a merchandise company scenario, where this company performed four purchasing transactions and two sales transactions. Then, calculate the balance of ending inventory and cost of goods sold after each sales transaction, assuming the company used the FIFO, Moving Average Cost. Use the following table to answer. (2 mark)

Answer:

Date

Purchase

Sales (COGS)

Ending inventory

Q2. ABC Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the current month. Prepare a schedule computing estimate retail inventory using the conventional methods. Round numbers. (1 mark).

Cost	Retail
Beginning Inventory	78,000	105,000
Net purchases	214,000	292,000
Net markups	14,000
Net markdown	3,700
Normal spoilage	2,300
Abnormal spoilage	3,400	5,500
Sales	310,000
Employees’ discount	11,200

Answer rating: 100% (QA)

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