Mega Company Limited uses the perpetual inventory system. The following information is available for the month of November 2019.

Date		Units	Cost per unit	Selling price per unit
2019			$	$
Nov 1	Beginning inventory	200	80
Nov 10	Purchase	300	120
Nov 23	Purchase	400	140
Nov 25	Sales	800		300

All the purchases and sales are made on account.

Required:

1. (a) Compute the cost of goods sold and ending inventory for the month of November 2019 using each of the following inventory costing methods.

   1. (i) First-In-First-Out (FIFO);

   2. (ii) Last-In-First-Out (LIFO); and

   3. (iii) Weighted Average Costing method.

   (Note: Show all your workings and calculation steps to earn full credit. Round the answers to the nearest dollar.)

2. (b) Prepare journal entries to record the sales and cost of goods sold on 25 November 2019 assuming weighted average costing method is adopted. (Note: Narrations are not required.)

3. (c) Assume the supplier offered Mega Company Limited a payment term of 3/10, n/30 with free shipping and handling. Prepare journal entries to record

   1. (i) the purchase of inventory on 23 November 2019; and

   2. (ii) the payment to the supplier on 1 December 2019.

      (Note: Narrations are not required.)

4. (d) Discuss which inventory costing method produces the highest gross profit when inventory costs are increasing.