NEVIZ Stationery & Supplies located in Spanish Town, Jamaica, sells a variety of school supplies including several brands of calculators. The business began the first quarter (January to March) of 2018 with 20 (Casio fx-85MS) calculators at a total cost of $124,800. During the quarter, the company completed the following transactions relating to the Casio fx-85MS calculators.

January 8 105 calculators were purchased at a cost of $6,140 each. In addition, the business paid a freight charge of $310 cash on each calculator to have the inventory shipped from the point of purchase to their warehouse.

January 31 The sales for January were 85 calculators which yielded total sales revenue of $809,030. (25 of these units were sold on account to longstanding customers) .

February 4 A new batch of 70 calculators was purchased at a total cost of $486,500.

February 10 6 of the instruments purchased on February 4 were returned to the supplier, as they were not of the model ordered.

February 28 During the month 62 calculators were sold at a price of $10,050 each.

March 4 A customer, to whom 9 calculators were sold during the first business day of February, returned 2 of the instruments, as they were of another brand.

March 10 Owing to an increased demand, a further 118 calculators were purchased at a cost of $7,800 each; these were subject to a trade discount of 2% each.

March 31 124 calculators were sold during March at a unit selling price of $11,060.

March 31 An actual count of inventory was carried out which revealed that there were 35 units of that brand of merchandise in the store room. Unless otherwise stated, assume that all purchases were on account and received on the dates stated.

Required:

(A) Prepare a perpetual inventory record for this merchandise, using the first in, first out (FIFO) method of inventory valuation to determine the companys cost of goods sold for the quarter and the value of ending. (22 marks)

(B) Given that selling, distribution and administrative costs associated with the Casio fx-85MS brand of calculators for the quarter were $34,840, $42,100 and $173,760 respectively, prepare an income statement for NEVIZ Stationery & Supplies (Casio fx-85MS) for the quarter ended March 31, 2018. (6 marks)

(C) Journalize the transactions for the month of January, assuming the company uses a: - Periodic inventory system - Perpetual inventory system (8 marks)

(D) The owner of the business, Neville Heaven, has stated that his objective is to cut back on his tax liability as much as possible and at the same time have his balance sheet looking at its best and is of the view that the LIFO method would be best to achieve both. Do you agree with Neville? Explain your answer clearly distinguishing between the first in, first out (FIFO) and last in, first out (LIFO) methods of inventory valuation, with reference to IAS 2. (4 marks)