8.8 D. Hart, a trader dealing in one product only, has the following transactions over a six-month period:

Date Quantity (in units) Unit cost (£)

Purchases 1 June 1992 1,500 90 1 August 1992 2,000 92 1 October 1992 3,000 93 Sales June 1992 340 140 July 1992 700 140 August 1992 800 144 September 1992 450 144 October 1992 900 144 November 1992 630 145 The trader held no stock at 31 May 1992.

(a) Applying the following principles of stock valuation, calculate D. Hart’s gross profit or loss for the six months ended 30 November 1992:
(i) first in first out; and (ii) last in first out.
(Ignore other expenses which may have been incurred for the period.)
(14 marks)

(b) If a trader uses last in first out as the basis of stock valuation, does this mean that he is left with the ‘oldest’ intake of stock at the end of the period? Briefly explain your answer.
(4 marks)
(ICSA, Introduction to Accounting, December 1992)