Inventory is one of the most important assets in a company's Statement of financial position. To this effect, IASB issued IAS 2 dealing with the valuation and presentation of inventory in the accounting books and financial statements. 2 Required: (a) Explain how the accrual principle applies in the way inventory is treated in the Income Statement. (2 marks) (b) You operate a hardware shop. You are given the following information regarding movement of cement stocks during the year ended 31 May 2017. 1 June 2016 14 June 2016 7 August 2016 10 October 2016 12 December 2016 06 January 2017 04 April 2017 22 May 2017 Opening Inventory 200 Units Purchases 500 Units Unit Price (K) K55 K58 Sales 300 Units Sales 300 Units Purchases 200 Units K63 Purchases 300 Units K66 Sales 200 Units Sales 200 Units Required: Calculate the closing inventory, sales value, cost of sales and the gross profit, using: (i) FIFO (ii) AVCO (9 marks) (9 marks)