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Unit/s Assessed FNSACC405 Maintain Inventory records
Assessment Name FNSACC405 Assignment
Type of assessment
This summative assessment will enable your assessor to make a judgement of competency based on the submission of your completed assessments against the requirements of the unit/s of competency in this module.
Benchmark
The assessment benchmark developed for each unit of competency is the evidence criteria used to judge the quality of performance (i.e., the assessment decision-making rules). Assessors use these benchmarks to make judgements on whether competency has been achieved and to determine if you have performed to the standard expected to meet the unit requirements.
Reasonable adjustment
Where appropriate monarch institute will allow flexibility in the way in which each unit is assessed based on the needs of an individual.
Assessment coding
Assessment of this course is established on competency-based principles:
S = Satisfactory NS = Not Satisfactory
If you fail to perform satisfactorily for the assessment in the prescribed way you may be assessed as ‘not satisfactory. You are required to be assessed as ‘satisfactory’ in all assessments for each unit of competency.
Re-assessment
Your assessment can be submitted after you have reviewed the learning materials and practiced enough to feel confident in your resubmission. You have two weeks from your last submission feedback to resubmit. You are re-assessed in only the areas where your assessor has indicated you were initially assessed as ns. It is at the assessor’s discretion to re-assess the entire assessment should an overall understanding not be demonstrated. When you are re-assessed as ‘satisfactory’ after re-submission you will achieve competency for this assessment.
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I acknowledge the assessment process has been explained and agree that i am ready to undertake assessment. I am aware of where to find the assessor’s feedback for the assessment. I am aware of the appeals process, should the need arise. I also understand i must be assessed as ‘satisfactory’ in all parts of the assessment/s to gain an overall competent result for the unit/s of competency. If i am found to be ns after a second attempt, it is at the assessor’s discretion whether i may be permitted one final attempt. I am aware that a ‘not competent’ final outcome means i may incur fees for re-enrolment in the unit/s.
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Submission instructions:
Complete the declaration of understanding and authenticity (above).
Once you have completed all parts of this assessment, login to the monarch learning management system (LMS) to submit your assessment.
In the LMS, click on the link to ‘submit [assessment name]’ in your course and upload your assessment files. Click save and then click submit assignment.
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Calculation and Short Answer
Activity instructions to candidates
• This is an open book assessment activity.
• Students should use a handheld calculator and/or software to perform calculations.
• You are required to read this assessment and answer all questions that follow.
• Please type your answers in the spaces provided.
• Estimated time for completion of this assessment activity: 2 hours
The following questions are based on the material in the textbook “Maintain Inventory Records” by Gavin Dumbrell.

Question 1
GGG Pty Ltd in accordance with organisational policy, procedures and practices uses a periodic inventory system and values its inventory using FIFO. GGG had the following records during the month of September:
Date Description Units Unit Cost Total Cost
Sept 1 Beginning inventory 5,000 $2.00 $10,000
Sept 13 Inventory purchased 8,000 $2.40 $19,200
Sept 21 Inventory purchased 7,000 $2.60 $18,200
Total 20,000 $47,400
GGG sold 14,000 units during the month.
Required:
Calculate inventory on 30th September and COGS for the month using each of the following inventory costing methods:
a. FIFO method (show your workings):
b. Weighted average cost method (show your workings):
c. Which method of inventory valuation has generated the lowest COGS for the month and what is the difference in COGS between the two inventory valuation methods? (show your workings):

Question 2
Stewart Ember Creations maintains inventory cards to record inventory movements and to help value their inventory. The company uses the perpetual inventory system.
The following transactions for SKU007 have been recorded for the month of June:
All transactions exclude GST.
For questions (b)(i) and (d)(i) 10% GST needs to add to the purchase cost listed for all credit purchases for Accounts Payable valuation purposes.
1/6 Opening balance: 400 units on hand @ $25.00 per unit.
6/6 Purchase on credit of 200 units @ $26.00 per unit; total cost $5,200.
7/6 Sale of 170 units.
9/6 Returned to the supplier for credit 20 units (originally purchased on 6/6).
17/6 Sale of 130 units.
23/6 Purchase on credit of 120 units @ $27.00 per unit; total cost $3,240.
28/6 Sale of 160 units.
30/6 Customer returned 10 units in good condition (originally sold on 17/6).
30/6 Stocktake reveals 235 units on hand. This gives rise to a stock variance when compared to the stock card balance.
Required:
(a) Complete a stock card using the Weighted Average Cost method (see next pages).
(b) (i) Provide journal entries (see next pages) for Purchases. Remember to record the 10% GST.
(b) (ii) Provide journal entries (see next pages) for Cost of Goods Sold and stock variance.
(c) Complete a stock card using the FIFO method (see next pages).
(d) (i) Provide journal entries (see next pages) for Purchases. Remember to record the 10% GST.
(d) (ii) Provide journal entries (see next pages) for Cost of Goods Sold and stock variance.
(e) How does a FIFO cost method of inventory valuation differ from a weighted average cost method?
(f) i) Refer to the Accounting Standard AASB102 Inventories. Define the cost and net realisable of inventories. Quote the relevant paragraphs of the Standard.
What is the inventory valuation rule? Quote the relevant paragraph from AASB102
f) ii) Research the inventory reconciliation process of comparing physical inventory counts with records of inventory on hand. Be sure to include 3-5 steps to take in the process, and provide several sentences of explanation for each step
(a) Complete the stock card using the Weighted Average Cost method.
Stewart Ember Creations
Using Weighted Average Cost
Purchases Sales Balance
Date Details
(if any) Qty Unit
Cost
($) Value
($) Qty Unit
Cost
($) Value
($) Qty Unit
Cost
($) Value
($)

(b) (i) Provide journal entries for Purchases:
Date Particulars Debit Credit

Purchases for June

(b) (i) Provide journal entries for Cost of Goods Sold and for inventory variance:
Date Particulars Debit Credit

Cost of Goods Sold for June
Inventory Variance for June
(c) Complete the stock card using the FIFO method.
Stewart Ember Creations
Using FIFO
Purchases Sales Balance
Date Details
(if any) Qty Unit
Cost
($) Value
($) Qty Unit
Cost
($) Value
($) Qty Unit
Cost
($) Value
($)

(d) (i) Provide journal entries for Purchases:
Date Particulars Debit Credit

Purchases for June
(d) (ii) Provide journal entries for Cost of Goods Sold and inventory variance:
Date Particulars Debit Credit

Cost of Goods Sold for June
Inventory Variance for June
(e) How does a FIFO cost method of inventory valuation differ from a weighted average cost method?

(f) i) Refer to the Accounting Standard AASB102 Inventories. Define the cost and net realisable of inventories. Quote the relevant paragraphs of the Standard.
What is the inventory valuation rule? Quote the relevant paragraph from AASB102.
f) ii) Research the inventory reconciliation process of comparing physical inventory counts with records of inventory on hand. Be sure to include 3-5 steps to take in the process, and provide several sentences of explanation for each step.

Question 3
POI Pty. Ltd. purchases comic books from publishers and resells them to customers. The company has a perpetual inventory system and assigns the cost of goods sold on a FIFO basis.
The company has the following records for the financial year 2016/17:
All figures exclude GST.
Inventory on hand 1 July 2016 1200 units @ $20 per unit
Purchases made during the financial year:
10/7/16 600 units @ $15 per unit
12/9/16 200 units @ $23 per unit
22/12/16 1400 units @ $16 per unit
3/2/17 400 units @ $14 per unit
5/5/17 100 units @ $22 per unit
Sales made during the financial year:
15/7/16 1000 units sold
20/10/16 900 units sold
1/1/17 1400 units sold
3/4/17 200 units sold
Stocktake on 30 June 2017 20 units damages and written off
Required:
Read the pdf document titled “Hints when using Excel” and use the Excel spreadsheet titled “POI Pty Ltd Stock Ledger Card Template” (both of which can be found in the LMS), to calculate the following:
You are required to upload your completed Excel Spreadsheet titled “POI Pty Ltd Stock Ledger Card Template” when you upload this assignment.
3a. Calculate: (refer to your completed Excel spreadsheet).
Cost of Goods Sold using perpetual FIFO method $
Closing inventory using perpetual FIFO method $
3b. Calculate: (refer to your completed Excel spreadsheet).
Average inventory (simplified) = (Opening inventory + Closing inventory) / 2 (show your workings):
=
3c. Calculate: the inventory turnover ratio.
Inventory Turnover Ratio = COGS / Average Inventory (show your workings):
=
3d. Set up a new Microsoft Excel (or equivalent spreadsheet program) file titled “Inventory Calculation Schedule”
Include a Title for your spreadsheet, and headings Month, Opening Inventory, Closing Inventory, Cost of Goods Sold, and Turnover Ratio across the top of your spreadsheet.
Enter the closing inventory and cost of goods sold data into your spreadsheet from the following table. The opening inventory for July is $24000.
Complete the table by entering the formulae for the calculation of average inventory (0 decimal places) and inventory turnover rate (2 decimal places).
Month Closing Inventory Cost of Goods Sold
Jul 6120 61680
Aug 8835 55670
Sept 16500 51270
Oct 12300 45620
Nov 7250 38974
Dec 8420 52378
Jan 10670 57683
Feb 11432 55234
Mar 9982 53489
Apr 8269 58925
May 9346 60334
Jun 10457 61259

Q3e The following data is provided in respect of the inventory of ABC Co at 30 June
ABC Co – Inventory Schedule 30 June xx
Item At Cost At NRV Inventory Value
001 $2,000 $2,200
002 8,800 7,900
003 1,000 1,200
004 2,000 3,000
005 6,600 5,000
006 9.500 10,000
Applying the lower of cost and net realisable value rule, determine the value of inventory for ABC Co for year ended 30 June

Question 4
Barbell Sports Pty Ltd has adopted a perpetual inventory system.
Required:
4a. Which of the following sequences best describes the keys steps in a perpetual inventory system? (Select the correct answer)
i. Purchases recorded on stock card COGS recorded at time of sale period end stocktake.
ii. Purchases recorded on stock card Period end stocktake COGS determined by stocktake.
iii. Purchases recorded as an expense no entry to COGS at time of sale COGS determined by stocktake.
Answer: _____________
b. Under the perpetual inventory system, an inventory gain has been detected. The journal entries to adjust for the inventory gain would be:
Debit: (enter the account name) _____________
Credit: (enter the account name) _____________
Adjusting for inventory gain
4 c. Refer to chapters 1 and 3 of your textbook and the link https://www.investopedia.com/terms/i/inventory-management.asp
Effective inventory management is essential to a competitively successful business.
i) Name the four main steps in inventory management. For each of these steps, list any relevant documentation such as source documents, schedules, reports
ii) Name the two recording systems for inventory

iii) What is the purpose of calculating the inventory turnover as a tool for inventory management?
iv) How does the calculation of the economic order quantity help with the management of inventory?

Question 5
Role Play Activity - Inventory
Kitchens R US
Organisational Inventory Management Policies and Procedures
Inventory Cards
Inventory cards are prepared and maintained in Excel files and stored with the Bookkeeper
Inventory
The warehouse manager is responsible for inventory in the warehouse. The warehouse manager must take adequate precaution to prevent theft or misappropriation of the inventory.
Stocktakes
A stock take of inventory is completed annually by the warehouse manager to verify the inventory on hand.
The warehouse manager to record detail on the stock take report about known lost, damaged or stolen inventory if applicable
When the stock take reveals an inventory value that does not equal the book value, adjustment journal entries will be made to record the discrepancy. Inventory Records must be updated to reflect the adjustment.
Accounting Standard AASB102 Inventories prescribes the accounting treatment for inventories and is to be followed. It describes how inventory is to be valued.
Roles:
This role play has two roles:
o You: bookkeeper
o Jane Simpson: the warehouse manager
Scenario:
You are the bookkeeper for Kitchens R US and you have just received the details of the annual stocktake conducted by the warehouse manager Jane Simpson. Your stock card records indicate that there should be 22 cooktops, 15 ovens and 11 refrigerators. The stocktake reveals that there were 21 cooktops, 14 ovens and 11 refrigerators in the warehouse. The cost of the cooktops is $589, cost of the ovens is $799, the cost of the refrigerators is $1,749.
Script:
• ask Jane 2 questions to determine the accuracy of the stocktake to give you comfort that the stocktake is correct
• tell Jane how you will address the discrepancy between the stock cards records and the stocktake. Discuss the relevant journal entries for the adjustment to the value of inventory
• tell Jane how stock must be valued according to AASB102
You will be assessed on the following:
• greeting Jane appropriately and professionally
• asking Jane questions about the accuracy of the stocktake
• telling Jane how you will address the discrepancy, the relevant journal entries, and updating of inventory cards
• telling Jane how stock must be valued according to AASB102
• speaking professionally and courteously with all parties.

Submission checklist:
Please check that you have completed the following before you upload your assessment:
? Sign and date the Declaration at the beginning of the assessment
? Check that all activities have been completed
? Upload POI Pty Ltd Stock Ledger Card, Activity 3 with your completed assessment
? Upload Role play video from Activity 5 with your completed assessment

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