R and A are brothers. Recently, their aunt died leaving them :1,000 each. Initially, they intended setting up in partnership selling pils and lager. However, R felt that there was no future in the lager market, whereas A expected that lager sales would boom. After an argument, the brothers decided to set up their own separate businesses, R trading in pils and A in lager.

The following shows the transactions undertaken by R in their first trading period:

Whilst R was finding that prices were rising swiftly in the market for pils, A by shrewd buying was able to obtain a lower price per unit for each successive purchase he made. The transactions that A undertook in the trading period were:

a. At the end of the period both brothers wish to withdraw all their profits (all transactions were made in cash). How much will each brother be able to withdraw:
i. calculating profit on a FIFO basis;
ii. calculating profit on a LIFO basis?

b. After withdrawing all profits in cash, what ability has each brother to replenish the stock of the goods he trades in? What assumptions do you need to make in answering this question?

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Purchases 260 pils at 1.25 each. Purchases 100 pils at 1.50 each. Purchases 200 pils at 3.75 each. Then, sales 300 pils at 4.00 each.