1a Albert Trading uses the perpetual inventory system. It recorded the following transactions for June.

1 Jun Beginning inventory of 20 units at $80 each 3 Jun Purchased 10 units at $85 each 5 Jun Sold 22 units at $120 each 10 Jun Purchased 15 units at $90 each 17 Jun Sold 10 units at $125 each 25 Jun Sold 5 units at $130 each

Compute the gross profit and ending inventory cost under FIFO method and under weighted average method. Round per unit cost and total cost to 2 decimal places for weighted average method. Show workings. b. Your friend Amos is running a trading business. His company did not use the perpetual inventory system and he is considering whether he should switch to perpetual inventory system. He showed you the purchases and sales for his company in the last six months (Assume beginning inventory is zero).

Units Unit Cost Purchases 1 January 400 @ $2,370 8 February 500 @ $2,350 10 March 600 @ $2,370 1 May 200 @ $2,380 15 June 200 @ $2,360

Sales January 200 February 210 March 210 April 220 May 180 June 210 Using the above information, explain to Amos why he should use perpetual inventory system for his business.