Anna started a picture framing business on 1 July 20X9. The following transactions occurred in the six months ended 31 December 20X9:

Additional information
1. On 1 July 20X9 Anna started the business by putting £10,000 into the bank account.
2. Two months’ credit is taken from suppliers.
3. One month’s credit is given to customers.
4. Expenses of £1,400 are paid each month as incurred.

Required
a. Calculate the value of closing inventory using the first in, first out (FIFO) method and the average cost (AVCO) method.
b. Prepare extracts from the statement of profit or loss for the six months to 31 December 20X9 and the statement of financial position at that date, to show the presentation of the above information, for each cost flow assumption used to value inventories.

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20/07/X9 25/08/X9 15/11/X9 Purchases 150 units at £20 each 225 units at £30 each 410 units at £40 each 18/09/X9 02/10/X9 20/12/X9 Sales 305 units at £45 each 50 units at £45 each 100 units at £75 each