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Financial Statements - Periodic Inventory Method - Accounting and Finance Assignment Help
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Assignment Task:
Task:
Part A – Inventory
You are the bookkeeper for Pants n Prints Limited (PnP), which is a retail store in the lower North Island. PnP uses the periodic inventory method. It is the end of the 20X7 financial year and you are responsible for preparing the financial statements. You have collated the following information to assist you in calculating the cost of goods sold:
- The opening inventory at 1 April 20X6 was $23,800.
- PnP has conducted a stock take and the stock on hand as at 31st March 20X7 is as follows:
|
Item |
Number of units |
Weighted Average cost per unit |
Total |
|
Floral Print Pants |
130 |
37.00 |
4,810 |
|
Animal Print Pants |
50 |
24.00 |
1,200 |
|
Art Deco Pants |
260 |
29.00 |
7,540 |
|
Batik Pants |
90 |
41.00 |
3,690 |
|
Striped Pants |
40 |
23.00 |
920 |
|
Calico Pants |
170 |
15.00 |
2,550 |
|
Total |
20,710 |
You have printed the relevant cost of sales ledgers for the year and these are included below:
|
|
Purchases |
|
|||||||||||
|
|
April |
Accounts Payable |
$ 8,633.00 |
|
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|
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May |
Accounts Payable |
$ 7,800.00 |
|
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|
|
Jun |
Accounts Payable |
$ 9,100.00 |
|
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|
|
July |
Accounts Payable |
$ 5,900.00 |
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|
Aug |
Accounts Payable |
$ 6,700.00 |
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|
Sept |
Accounts Payable |
$ 5,500.00 |
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Oct |
Accounts Payable |
$ 6,000.00 |
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|
Nov |
Accounts Payable |
$ 9,000.00 |
|
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|
|
Dec |
Accounts Payable |
$ 9,200.00 |
|
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|
|
Jan |
Accounts Payable |
$ 6,000.00 |
|
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|
|
Feb |
Accounts Payable |
$ 6,400.00 |
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|
Mar |
Accounts Payable |
$ 6,000.00 |
|
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|
|
$ 86,233.00 |
|
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|
|
Purchase returns and allowances |
|
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|
|
|
April |
Accounts payable |
$ 431.65 |
|
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|
|
|
Sept |
Accounts payable |
$ 390.00 |
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Oct |
Accounts payable |
$ 455.00 |
|
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|
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Jan |
Accounts payable |
$ 295.00 |
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Feb |
Accounts payable |
$ 335.00 |
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Mar |
Accounts payable |
$ 274.35 |
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|
|
$ 2,181.00 |
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Sales |
|||||||||||||
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April |
Accounts receivable |
$ 6,956.52 |
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April |
Bank |
$ 11,130.43 |
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May |
Accounts receivable |
$ 3,913.04 |
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May |
Bank |
$ 6,260.87 |
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Jun |
Accounts receivable |
$ 8,956.52 |
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Jun |
Bank |
$ 14,330.43 |
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July |
Accounts receivable |
$ 5,652.17 |
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July |
Bank |
$ 9,043.48 |
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Aug |
Accounts receivable |
$ 5,565.22 |
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Aug |
Bank |
$ 8,904.35 |
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Sept |
Accounts receivable |
$ 3,982.61 |
||||||||||
|
|
Sept |
Bank |
$ 6,372.17 |
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|
|
Oct |
Accounts receivable |
$ 5,430.43 |
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Oct |
Bank |
$ 8,688.70 |
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Nov |
Accounts receivable |
$ 2,869.57 |
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Nov |
Bank |
$ 4,591.30 |
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Dec |
Accounts receivable |
$ 3,913.04 |
||||||||||
|
|
Dec |
Bank |
$ 6,260.87 |
||||||||||
|
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Jan |
Accounts receivable |
$ 5,217.39 |
||||||||||
|
|
Jan |
Bank |
$ 8,347.83 |
||||||||||
|
|
Feb |
Accounts receivable |
$ 3,913.04 |
||||||||||
|
|
Feb |
Bank |
$ 6,260.87 |
||||||||||
|
|
Mar |
Accounts receivable |
$ 4,260.87 |
||||||||||
|
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Mar |
Bank |
$ 6,817.26 |
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|
|
$ 157,639.00 |
||||||||||||
|
Sales returns and allowances |
|||||||||||||
|
April |
Accounts receivable |
$ 278.26 |
|||||||||||
|
Aug |
Accounts receivable |
$ 445.22 |
|||||||||||
|
Oct |
Accounts receivable |
$ 156.52 |
|||||||||||
|
Dec |
Accounts receivable |
$ 250.43 |
|||||||||||
|
Jan |
Accounts receivable |
$ 358.26 |
|||||||||||
|
Mar |
Accounts receivable |
$ 573.31 |
|||||||||||
|
$ 2,062.00 |
|||||||||||||
Required:
Using the information above:
- Create the two journals required to update the inventory account as at 31st March 20X7. Use the template below to complete this question.
- Calculate the cost of goods sold and gross profit for PnP for the year ended 31st March 20X7. Use the template below to complete this question.
Question One
Create the two journals required to remove the value of opening inventory and record the value of closing inventory as at 31st March 20X7.
|
Date |
Particulars |
Dr |
Cr |
|
Date |
Particulars |
Dr |
Cr |
Question Two
Calculate the cost of goods sold and gross profit for PnP for the year ended 31st March 20X7.
|
PnP Limited |
|||
|
Statement of comprehensive Income (extract) |
|||
|
for the year ended 31st March 20X7 |
|||
|
$ |
$ |
||
|
Sales |
|||
|
less: Sales returns |
|||
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Net sales |
|||
|
less: Cost of Goods Sold |
|||
|
Opening inventory |
|||
|
Purchases |
|||
|
less: Purchase returns |
|||
|
less: Closing inventory |
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Cost of Goods Sold |
|||
|
Gross Profit |
|||
Part B – Financial Statements
Sally runs her own retail business called Sally’s Shoes Limited (SSL). SSL uses a perpetual inventory system. It is the end of the 20X7 financial year and Sally has asked you to help her prepare the financial statements for the year ended 31st March 20X7. You have been provided with the adjusted trial balance as at 31st March 20X7.
|
Trial Balance |
|||
|
Sally’s Shoes Limited |
|||
|
as at 31st March 20X7 |
|||
|
DR |
CR |
|
|
|
Bank #1 |
107,300 |
|
|
|
Bank #2 |
16,800 |
|
|
|
Accounts Receivable |
24,800 |
|
|
|
Provision for Doubtful Debts |
2,500 |
|
|
|
Inventory |
8,300 |
|
|
|
Short Term Deposit |
25,000 |
|
|
|
Work Vehicle - Sales Team |
15,600 |
|
|
|
Accumulated Depreciation - Work Vehicle |
6,240 |
|
|
|
Accounts Payable |
19,000 |
|
|
|
Loan |
55,420 |
|
|
|
Capital (as at 1 April 20x6) |
83,900 |
|
|
|
Funds Introduced |
16,000 |
|
|
|
Drawings |
20,400 |
|
|
|
Income |
190,000 |
|
|
|
Cost of Goods Sold |
36,750 |
|
|
|
Interest Income |
5,720 |
|
|
|
Advertising |
9,500 |
|
|
|
Bad Debt Expense |
2,180 |
|
|
|
Depreciation Expense |
3,120 |
|
|
|
Freight |
1,900 |
|
|
|
Insurance |
1,690 |
|
|
|
Interest Expense |
3,400 |
|
|
|
Kitchen Supplies |
1,680 |
|
|
|
Motor Vehicle Expenses |
4,800 |
|
|
|
Rent Paid |
22,300 |
|
|
|
Stationery |
3,500 |
|
|
|
Sales Commission Paid |
13,000 |
|
|
|
Subscription Fees |
680 |
|
|
|
Wages |
56,080 |
|
|
|
Total |
378,780 |
378,780 |
|
Required:
Using the adjusted trial balance prepare the Profit & Loss Statement and the Balance Sheet for the year ended 31st March 20X7 using the templates provided
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