During its first month of operations, a business made purchases and sales as shown in the table below:

Date Number of units Unit cost Number of purchased units sold Jan. 5 100 £1.00 Jan. 10 50 Jan. 15 200 £1.10 Jan. 17 150 Jan. 24 300 £1.15 Jan. 30 200 All sales were made at £2 each.

Required Calculate the profit for the month and the stock value held at the end of the month using:

(a) the FIFO approach to the issue of units for sale, where:

(i) the calculation is carried out at the date of sale; and

(ii) the calculation is carried out at the end of the month without regard for the date of sale; and

(b) the LIFO approach to the issue of units for sale, where:

(i) the calculation is carried out at the date of sale; and

(ii) the calculation is carried out at the end of the month without regard for the date of sale; and

(c) the average-cost approach to the issue of units for sale, making the calculation at the end of the month without regard for the date of sale.

AppendixLO1