[20 mins; 21 points) Question 3 Accounting for Inventory and cost of goods sold This question consists of two independent parts: Part A and Part B PARTA Tomas Inc. sells product A and uses a perpetual inventory system. Simplified information about product A for the year 2009 is given in the following table. The company's fiscal year ends on December 31, 2009. a) b) c) d) e) Date December 31, 2008 March 21, 2009 June 20, 2009 August 19 November 29, 2009 Transaction End Inventory Purchase Sale Purchase Sale Units Cost/Price per unit 7,000 $8 19,000 $9 10,000 $29 8,000 $11 16,000 $31 a. Required (Show all your calculations): 1. Compute the cost of ending inventory, the cost of goods sold, and the gross profit, assuming the company uses the following inventory costing method: FIFO. b. Weighted average. [6 points] 2. Prepare the journal entries to record transaction (b) and (c), assuming that both (b) and (c) are cash transactions. [3 marks] 3. Assume that the company purchased product A from a supplier on December 30, 2009. The merchandise, at a cost of $1,000, had not arrived at the company's warehouse until January 2, 2010, and was not included in the inventory count at the year-end. What effect would this error have on the company's cost of goods sold, gross profit, and profit for 2009? Be as specific as possible [3 marks] PART B 1. Which inventory costing method best fits each of the independent descriptions below? Specify the appropriate method for each description separately. Briefly explain why a. It results in a cost of ending inventory that is close to the current cost of replacing it. [3 points] b. It maximizes reported profit when inventory purchase prices are falling. [3 points] C. It is used to record the cost of automobiles, jewellery, and art objects. [3 points)