A businessman started trading with a capital in cash of £6,000, which he placed in the business bank account at the outset. His transactions, none of which were on credit, were as follows (in date sequence) for the first accounting period. All takings were banked immediately and all suppliers were paid by direct debit. He traded in only one line of merchandise.

In addition, he incurred expenses amounting to £1,740, of which he still owed £570 at the end of the period.

Required
Prepare separately using the FIFO (first in, first out), the LIFO (last in, first out) and (AVCO) weighted average cost (calculated for the period to the nearest penny) methods of inventory valuation:
a. A statement of cost of sales for the period;
b. A statement of financial position at the end of the period.

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Quantity No. 1,200 1,000 600 900 800 700 Purchases Price per unit £ 1.00 1.05 1.10 1.20 1.25 1.30 Quantity No. 800 600 1,100 1,300 400 Sales Price per unit £ 1.70 1.90 2.00 2.00 2.05