‘Little Red Riding’ began business on 1 June 2019. The business is a partnership, between Mr Wheeler and Mrs Wheeler. The business will sell children’s bicycles at the local markets. The business is not registered for GST. The following transactions occurred during June 2019:

Date:	Details:
1-Jun	Mr and Mrs Wheeler deposited $30,000 into the business bank account.
2-Jun	Purchase of bicycles (100 small bicycles, and 100 large bicycles) from Red Bikes Rock Ltd on account for $10,000 ($50 per bicycle) on terms of 2/10, n/30.
4-Jun	Little Red Riding received an invoice from Fast Freight Ltd relating to delivery costs for the bicycles purchased on 2 June. The amount due is $300, and is due on 18 June.
5-Jun	Sent a cheque in the mail to Groove Markets Ltd for $300, for stall fees at the local markets for the month of June.
6-Jun	Sale of 30 bicycles (20 small bicycles, and 10 large bicycles) at the local markets, at $100 each. All of the customers paid by cash. The money was banked at the end of the day.
10-Jun	Paid Red Bikes Rock Ltd for purchases made on 2 June (net of the early payment discount), by electronic funds transfer.
13-Jun	Sale of 10 small bicycles to a local childcare centre, at $100 each, on 30 day credit terms.
15-Jun	Sent a cheque in the mail to Fast Freight Ltd, in relation to the invoice received on 4 June.
22-Jun	Purchase of bicycles (30 small, and 10 large) from Red Bikes Rock Ltd on account for $2,200 ($55 per bicycle) on terms of 2/10, n/30.
23-Jun	Little Red Riding received an invoice from Fast Freight Ltd relating to delivery costs for the bicycles purchased on 22 June 2019. The amount due is $180, and is due on 6 July 2019.
24-Jun	Returned 20 of the small bicycles purchased on 22 June as they were damaged.
28-Jun	Sale of 40 bicycles (25 small, and 15 large) at the local markets, at $100 each. All of the customers paid by cash. The money was banked at the end of the day.
30-Jun	A stocktake was completed, and the number of bicycles on hand was 139 (54 small bicycles, and 85 large bicycles).

Mr and Mrs Wheeler have come to you for assistance, as they would like to use the perpetual inventory system and the First-in-first-out (FIFO) costing method, but are not sure how to set this up.

Required:

i) Prepare an Excel worksheet for each of the bicycle lines for June (one for the small bicycles, and one for the large bicycles) using the FIFO costing method to keep track of the number of bicycles purchased, bicycles sold, bicycles on hand, cost of goods sold and gross profit made.

ii) Prepare journal entries (including any adjusting entries) for all of the business’s transactions for June (using the perpetual inventory system and FIFO costing method). Include dates, references and narrations.

iii) Prepare T-accounts in an Excel spreadsheet, and post all of the above journal entries to the T-accounts. Include dates and references for each entry. Total all of the T-accounts to determine their balances at the end of the June 2019.

iv) Prepare the ‘Adjusted Trial Balance’ in an Excel spreadsheet as at 30^th June 2019. Use formulas to generate all of the figures in the ‘Adjusted Trial Balance’ from the balances in the T-Accounts.

v) The business has a year-end of 30^th June. Prepare the closing entries as at 30^th June 2019..

Answer rating: 100% (QA)

Date Account Title Debit Credit 1Jun Cash 30000 PartnersCapital 30000 2Jun Merchandise Inventory1001... View the full answer