You are working for the temporary accounting employment agency known as Accountants. Today you have been asked to work at High Jewellery, a small jewellery store that operates in inner city Sydney and is owned by Alexia Smith. Your task here is to provide advice about the firm’s inventory system. The following information relates to the transactions of one type of sapphire necklace (product no. N1234) for the month of March 2021:

			Unit	Unit Cost	Total Cost
March	1	Inventory on hand	80	$290.00	$23,200.00
	6	Sales @ $500	48
	9	Purchase	64	$300	$ 19,200.00
	13	Sales returns	8
	18	Purchase	80	$310.00	$24,800.00
	23	Sales @$510	96

Required:

a. Assuming Periodic Inventory System with FIFO cost flow method is used by High Jewellery. A physical count shows the ending inventory for the sapphire necklace is 87 units at the end of the month of March. Calculate the ending inventory and cost of sales for March 2021.

b. Assuming Perpetual Inventory System with FIFO cost flow method is used, prepare an inventory card and determine the ending inventory and cost of sales for the month.

c. Which inventory system would you recommend to the business and why?