1: a) Mona Ltd, a Limited Liability Company, maintains inventory on Average Method (AVCO). The following transactions in respect of Material 'Bleep' occurred during the month of January 2020. Date cost 1 January 2020 stock 2 January 2020 150 Items Opening 10 units unit Purchase 600 12 3 January 2020 Sold 10 January 2020 Purchase 250 450 13 15 January 2020 Sold 600 20 January 2020 Purchase 300 14 29 January 2020 Sold 400 Using Average Cost (AVCO) Method, you are required to calculate: (i) Cost of inventory as on 31 January 2020 (ii) Cost of goods sold during the month of January 2020 Show all the workings clearly (13 marks) b) Assume that you have just joined as a trainee Accountant in Sonu Ltd, a medium sized Company. The Company was using LIFO method of valuation of inventory and earned profit of $90,000 for the year ended 31/12/2020. As per the new rule, Sonu Ltd understood that LIFO method of valuation is not allowed, and now it has to shift from LIFO to FIFO method for valuation of its inventory. The Accountant has finalised to apply FIFO method and calculated the inventories as follows: Date FIFO LIFO 1.1.2020 12,000 14,000 31.12.20 19,000 16,000 As a trainee Accountant, (i) you are asked to explain the advantages of FIFO method. and how it affects the Net Income. (ii) Also, calculate the Net profit using FIFO method of Valuation of Inventory. (12 marks)