Fraser Department Stores Ltd operates a number of department stores in the United Kingdom. Assume that the company’s accounting year ends each 31 January.

The store in London had an opening stock in year 20x0 of 55,000 units that cost £1,650,000. During the year the store purchases goods on credit as follows:

Cash payments on credit during the year totalled £9,110,000.
During fiscal year 20x0, the store sold 285,000 units of merchandise for £14,000,000, of which £4,100,000 was for cash and the remaining was on account. Assume that Fraser uses the LIFO stock valuation method.

Operating expenses for the year were £3,180,000. Fraser paid two-thirds in cash and accrued the rest. The store accrued income tax at the rate of 32 percent.

Required 

1 Make summary journal entries to record the store’s transactions for the year ended 31 January 20x0. Fraser uses a perpetual inventory system to record stocks.
2 Determine the closing stock based on LIFO stock valuation method using a T-account.
3 Prepare the store’s income statement for the year ended 31 January 20x0.

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March (50,000 units @ 38) August (40,000 units @ 34.5) October (180,000 units @ 35) Total purchases 1,900,000 1,380,000 6,300,000 9,580,000