Chapter $6$: Inventories and cost of sales

Al$-$Reem Company uses a perpetual inventory system. The following information related to its merchandise inventory during the month of October $2017$:

$\backslash$table$[[$Date$,$Transaction,Quantity$],[$Oct$.1,$Beginning inventory,$2,000$ units; cost $6\mathrm{.}1$ Q$.$R each$],[$Oct$.8,$Purchase,$10,000$ units; cost $5\mathrm{.}5$ Q$.$R each$],[$Oct$.14,$Sale,$8,000$ units; price $12$ Q$.$R each$],[$Oct$.18,$Purchase,$6,000$ units; cost $5$ Q$.$R each$],[$Oct$.25,$Sale,$7,000$ units; price $11$ Q$.$R each$]]$

Required:

A$.$ Determine the inventory balance Al$-$Reem would report in its October $31,2017$ balance sheet and cost of goods sold it would report in its October $31,2017$ income statement using each of the following cost flow methods:

First$-$in$,$ first$-$out $($FIFO$)$

Weighted Average cost

B$.$ Which method generates highest gross profit? Show your calculations.

First In$,$ First Out $($FIFO$)$:

$\backslash$table$[[$Date$,$Purchase $($IN$),$Sale $($OUT$),$Balance$],[,,,],[,,,],[,,,],[,,,],[,,,],[,,,]]$

Weighted Average Cost

$\backslash$table$[[$Date$,$Purchase $($IN$),$Sale $($OUT$),$Balance,$\backslash$table$[[$Average$],[$Cost$]]],[,,,,],[,,,,],[,,,,],[,,,,],[,,,,],[,,,,]]$