E6-6 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
(b) Which costing method gives the higher ending inventory? Why?
(c) Which method results in the higher cost of goods sold? Why?
E8-6 Lisa Ceja is unable to reconcile the bank balance at January 31. Lisa's reconciliation is
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
(a) Prepare a correct bank reconciliation.
(b) Journalize the entries required by the reconciliation.
The solution uses FIFO and LIFO methods to estimate costs of goods sold.