XY Ltd's sells T-shirts. It uses the periodic inventory system. It's inventory at the beginning of...

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XY Ltd's sells T-shirts. It uses the periodic inventory system. It's inventory at the beginning of the month June and all purchases during the month of June 2019 are provided as below. Ignore GST. 1/6 Beginning inventory 10/6 Purchase 15/6 Purchase 23/6 Purchase Totals Units 1050 750 450 750 3,000 A physical count on 30 June verified that 975 units were on hand. Required: Total cost ($) 18,900 14,175 8,910 15,750 $57,735 a) Determine the Ending inventory and Cost of Sales for the month of June, using the FIFO costing method. (4 marks) b) If all inventories are sold in the same price of $50, prepare the relevant part of the income statement for the month of June. (2 marks) c) Would you recommend the Perpetual Inventory System to the management of XY Ltd? Explain the reason for your recommendation. (2 marks) XY Ltd's sells T-shirts. It uses the periodic inventory system. It's inventory at the beginning of the month June and all purchases during the month of June 2019 are provided as below. Ignore GST. 1/6 Beginning inventory 10/6 Purchase 15/6 Purchase 23/6 Purchase Totals Units 1050 750 450 750 3,000 A physical count on 30 June verified that 975 units were on hand. Required: Total cost ($) 18,900 14,175 8,910 15,750 $57,735 a) Determine the Ending inventory and Cost of Sales for the month of June, using the FIFO costing method. (4 marks) b) If all inventories are sold in the same price of $50, prepare the relevant part of the income statement for the month of June. (2 marks) c) Would you recommend the Perpetual Inventory System to the management of XY Ltd? Explain the reason for your recommendation. (2 marks)

Answer rating: 100% (QA)

a To determine the ending inventory and cost of sales using the FIFO costing method we need to allocate the costs based on the order in which the inve... View the full answer