Question 1: Zambia Company reports the following for the month of June.
Units Unit Cost Total Cost
June 1 Inventory 200 $5 $1,000
12 Purchase 300 6 1,800
23 Purchase 500 7
30 Inventory 160
Instructions
(a) Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO and (2) LIFO.
(b) Which costing method gives the higher ending inventory? Why?
(c) Which method results in the higher cost of goods sold? Why?
Question 2: Lisa Ceja is unable to reconcile the bank balance at January 31. Lisa's reconciliation is as follows.
Cash balance per bank $3,660.20
Add: NSF check 590.00
Less: Bank service charge 25.00
Adjusted balance per bank $4,225.20
Cash balance per books $3,875.20
Less: Deposits in transit 530.00
Add: Outstanding checks 930.00
Adjusted balance per books $4,275.20
Instructions
(a) Prepare a correct bank reconciliation.
(b) Journalize the entries required by the reconciliation.