Financial Accounting: Inventory and Cash Management

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Financial Accounting
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Table of Contents
Question 1........................................................................................................................................3
I)...................................................................................................................................................3
II).................................................................................................................................................3
Question 2........................................................................................................................................6
Question 3........................................................................................................................................8
Question 4........................................................................................................................................9
I)...................................................................................................................................................9
II)...............................................................................................................................................10
III)..............................................................................................................................................12
Question 5......................................................................................................................................13
References......................................................................................................................................15
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Question 1
I)
MEMORANDOM
DATE: 25 Feb. 2019
TO: Mr and Mrs Spot
FROM: Spottie Ltd.
SUBJECT: Discussing the two inventory methods.
The new two inventory methods are useful for the company, such as periodic and
perpetual methods.
The periodic method is the term of Physical counting; it means the accounting system is
maintaining the records of the goods,and they will find the value of the certain points in
time (Accounting tools, 2019).
On another hand it will record all the physical stock count in the proper data of the
company.
The FIFO method is the first inventory purchased then it willbe sold first, and inventory
bought later then it will be sold later.
The perpetual method is a method of accounting to records the inventory of the
organisation, sale or purchase of the inventory immediately through the computerised
method.
The LIFO is the opposite method of FIFO, Weighted average cost is to divide the cost
of goods by the sale of goods, and then it will make the weighted average cost of per
unit.
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It chooses the one method, which is suitable for the company.
Thanks for the co-operation (Accounting tools, 2019).
II)
LIFO and Weighted Average Method
Date Particular
L.
F
Amount
(Dr.)
Amount
(Cr.)
1-Jan Capital A/c Dr. 20000
To Share capital 20000
(Being capital introduced in the firm)
3-Jan Purchase A/c Dr. 2400
To Plush Toys Ltd 2400
(Being Toys purchased from Plush Toys Ltd )
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6-Jan Rainbow Preschool A/c Dr. 1600
To Sale 1600
(Being 160 toys sale to Rainbow Preschool )
9-Jan Purchase A/c Dr. 2100
To Plush Toys Ltd 2100
(Being Toys purchased from Plush Toys Ltd )
12-
Jan Plush Toys A/c Dr.
To Bank 2400
(Being EFT done to Plush Toys) 2400
15- Bank A/c Dr. 1600
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Jan
To Rainbow Preschool 1600
(Being amount received from Rainbow
Preschool )
20-
Jan Sydney Children’s Hospital 2000
To sale 2000
(Being toys sale to Sydney Children’s Hospital)
22-
Jan Purchase A/c Dr. 1050
To Plush Toys Ltd 1050
(Being Toys purchased from Plush Toys Ltd )
24- Plush Toys A/c Dr. 1050
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Jan
To Bank 1050
(Being EFT done to Plush Toys)
25-
Jan Bank 2400
to sale 2400
(Being Sale to online customers)
FIFO Method
Date Particular
Quantit
y
Total cost of
Quantity
Quantity
cost
3-Jan Purchase from Plush Toys 400 2600 6.5
6-Jan Sale to Rainbow Preschool -160 -1600 10
20-Jan
sale to Sydney Children’s
Hospital -200 -2000 10
25-Jan sale to online Customer -40 -400 10
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Balance (Profit) 0 1400
9-Jan Purchase from Plush Toys 300 2100 7
25-Jan Sale to Online Customer -160 2000 -12.5
Profit 160 880 5.5
Balance (Profit) 300 12.5
22-Jan Purchase from Plush Toys 150 1050 7
31-
Jan Closing Balance 290
Profit 2280
Weighted average method
Date Particular
Quantit
y
The total cost of
Quantity
Quantity
Cost
3-Jan Purchase from Plush Toys 400 2600 6.5
6-Jan Sale to Rainbow Preschool -160 -1600 10
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Profit 160 560 3.5
Closing stock 240 1000 3.5
9-Jan Purchase from Plush Toys 300 2100 7
20-
Jan
sale to Sydney Children’s
Hospital -200 2000 -10
Profit 200 600 3
Balance 100 7 700
Closing balance 50
Sold in 25 Jan 50 250 5
22-
Jan Purchase from Plush Toys 150 1050 7
25-
Jan Sale to online customer -200 -2400 12
Profit 200 1000 5
Closing stock 290
Profit 2160
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Question 2
Business Report on Xero Cloud Accounting Software
Introduction
In this report, it discusses the cloud-based accounting system and Xero cloud based accounting
system is useful for the company to get the work in the proper timing, and easy working style for
the company. Spottie Ltd will need the computerised accounting system for the working.
Xero Cloud Accounting System
Xero Cloud Accounting System is the software company, which is in New Zealand Software
Company, it studies all the Australian stock exchange of the all the organisations with the need
of the country’s norms and policies. It makes all the solutions of all the sectors of the
organisation. It is fully satisfied with the small and medium organisation of Australia. It is
providing many facilitiesto companies such as invoice requisition, payroll management, and
banks transaction easily to the company (Accounting tools, 2019). It records all the transaction
with the needs of the company; it fulfils the required all the companies demand.
Advantages
 It is working in the paperless work in the company, it is easy to find the old thing in the
software, and it will recognise all the particles needed by the organisation.
 The software is the best security in the world class in the company; it can only use with the
fully authentic persons, who knows the correct id and password for the use of the software. In
the current situation, this is the biggest problem to secure the data of the company.
 It will check many times in the transacting in the field of work, and any error of the
transaction that all will recognise and they will solve all the problems, and they will give
accurate in the accounting.
Disadvantages
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 For the small companies, it is costly to manage the cost of the software to use the company
for the accounting.
 In the large organisations, there is having most problems of storage because there is having
large numbers of the transaction, which is having the biggest problems. The large
organisation is having that type of problem, so they cannot use the software.
ForSpottie Ltd
As per the all the study, it has started before two years, this is the growing company in the
market to make the affordable to use the cloud-based accounting system, and it is great full to
use the accounting system (Accounting tools, 2019). The system is fit for the company, which
does the effective work in the environment to use, and they will create an easy method to use for
the employees.
Conclusion
In this report, it discussed all the advantage and disadvantage of cloud-based accounting system,
from the Xero Cloud Accounting System, in the final decision, there is a requirement to use the
cloud accounting system.
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