On 1 July 2023, Wired for Sound, a retailer and installer of car stereo systems, commenced trading. The following transactions occurred during the first month of operations:

July 2: Purchased 12 stereo systems at cost of $450 each

7: Sold and installed 8 stereo systems for $950 each.

12: Returned 2 defective systems purchased on 2 July.

18: Purchased 15 stereo systems at a cost of $455 each.

21: Sold and installed 11 systems for $950 each.

25: Purchased 25 stereo systems at a special price of $420 each.

29: Sold and installed 16 stereo systems for $1318 each.

30: During one of the installations, one of the technicians identified one of the stereo systems was faulty. This system was from the purchase on 25 July. The manager contacted the Company, returned the faulty system and received a credit to the business's account. Other expenses for the month totalled were $1800.

Required

(e) Record the information on a perpetual inventory record using three of the following methods: iv. FIFO v. moving average vi. LIFO.

(f) Prepare a Statement of Profit or Loss based on each of the three methods of inventory cost flows.

(g) Provide a rationale to the manager of Wired for Sound for the variation in the values for the cost of sales and net profit presented under each method in the Statement of Profit or Loss.

(h) List the factors that management should consider when choosing an inventory cost flow method. Which method do you recommend is the most appropriate for adoption by Wired for Sound?