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5. Fountain Ltd started a business on 1 December 2020 trading in office water coolers. In the month to 31 December 2020 the following transactions

5. Fountain Ltd started a business on 1 December 2020 trading in office water coolers. In the month to 31 December 2020 the following transactions occurred: Required: Purchases Tonnes Qty Unit cost 01-Dec 18 22 09-Dec 7 24 20-Dec 10 27 Sales Tonnes Sell price 11-Dec 22-Dec 20 30 11 32 a) Calculate the gross profit for December 2020 and the value of closing inventory on 31 December 2020 using FIFO and AVCO. b) Briefly describe the following inventory valuation methods: (30 marks) i. FIFO ii. LIFO iii. AVCO (10 marks)

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