Julia has recently opened a dry fruitswholesale company dedicated to thesale of peanuts, almonds and pistachios. Thecompanys name is The Nuthouse.The Nuthousewas founded during 2020. Julias passion, longevityand wealth of knowledge in the industry led to TheNuthouse expanding rapidly, creating a network of partners that spans farming operations in the key growing territories of South Africa, Australia, Kenya, Malawi, Zimbabwe, Mozambique and Brazil.

QUESTION 2

Prepare an Income statement of the company at the end of February for each one of the products sold by Julia using the following methods of valuation of theinventory: You can ignore all tax consequences.

a. The average cost method

b. FIFO method and

Calculate the balances of the inventory at the end of the month for each valuation method and provide explanations of the calculations.

QUESTION 3

In order to compare with the records made by her accountant, Julia asks you to prepare the journal entries for all the purchases and sales of the productsusing the FIFO method valuation.

During February, its first month of activity, TheNuthouse made the following transactions:

12:28 1 Over and above these transactions, the company has had the following expenses: The company's accountant recommended that they should use the average cost method in order to determine the cost of the inventory sold but he is not sure about the consequences it may have on their financial situation