Exercise 9.10 ★ ★ ★ ASSIGNING COSTS AND END-OF-PERIOD ADJUSTMENTS Lund Retailing Ltd is a food wholesaler that supplies independent grocery stores. The company operates a perpetual inventory system, with the fi rst-in, fi rst-out method used to assign costs to inventory items. Freight costs are not included in the calculation of unit costs. Transactions and other related information regarding two of the items (baked beans and plain fl our) carried by Lund Ltd are given below for June 2013, the last month of the company’s reporting period. Baked beans Plain fl our Unit of packaging Case containing 25 × 410 g cans Box containing 12 × 4 kg bags Inventory @ 1 June 2013 350 cases @ $19.60 625 boxes @ $38.40 Purchases 10 June: 200 cases @ $19.50 plus freight of $135 19 June: 470 cases @ $19.70 per case plus freight of $210 3 June: 150 boxes @ $38.45 15 June: 200 boxes @ $38.45 29 June: 240 boxes @ $39.00 Purchase terms 2/10, n/30, FOB shipping n/30, FOB destination June sales 730 cases @ $28.50 950 boxes @ 40.00 Returns and allowances A customer returned 50 cases that had been shipped in error. The customer’s account was credited for $1425. As the June 15 purchase was unloaded, 10 boxes were discovered damaged. A credit of $384.50 was received by Lund Retailing Ltd. Physical count at 30 June 2013 326 cases on hand 15 boxes on hand Explanation of variance No explanation found — assumed stolen Boxes purchased on 29 June still in transit on 30 June Net realisable value at 30 June 2013 $29.00 per case $38.50 per box Required 1. Calculate the number of units in inventory and the FIFO unit cost for baked beans and plain fl our as at 30 June 2013 (show all workings). 2. Calculate the total dollar amount of the inventory for baked beans and plain fl our, applying the lower of cost and net realisable rule on an item-by-item basis. Prepare any necessary journal entries (show all workings).