1. Madam Kwan is the owner of Carloss Enterprise. The financial year end of the business is on 31 December annually. You are required to determine the Gross profits using

(a) the FIFO

(b) the LIFO and

(c) the average methods

The units of an item available for sale and purchade during the year were as follows:

1 Jan No Opening Balance

2 Jan Purchase 60 units at RM575

15 Jan Sales 40 units at RM700

15 Jan Purchase 80 units at RM550

27 Jan Sales 40 units at RM720

2. Explain why the weighted average cost method's gross profits is more than the FIFO's method.