Allegro Co supplies coal to a local power station. During the financial year 2017, the following transactions took place. Selling price/ Date Purchased/sold Tonnes cost per tonne Jan-1 Beginning Inventories 4,000 30 Feb-3 Purchased 3,000 40 Apr-15 Purchased 2,000 45 Apr-23 Sold 4,000 80 June-17 Purchased 500 50 Aug-25 Sold 1,000 85 Oct-8 Sold 500 70 Dec-20 Sold 3,000 75 a) Suppose that the firm employs the First-In-First-Out (FIFO) method of inventories costing. Calculate the cost of goods sold, closing inventories and gross profit margin. [5 marks] b) Suppose that the firm employs the Last-In-First-Out (LIFO) method of inventories costing. Calculate the cost of goods sold, closing inventories and average inventory turnover period. [5 marks] c) Suppose that a business intends to change its accounting policies regarding inventories for the forthcoming year. It intends to switch from the LIFO to the FIFO method of inventories costing. Prices of goods purchased are known to rise during the forthcoming year. Discuss qualitatively the changes in profit and ending inventories. [5 marks]