PQR Ltd is a US-based retailer and it uses LIFO method for valuation of inventory. Following information is obtained from its inventory records for 2019:

Inventory Units Unit price $

Opening balance 5000 10

January purchases 5000 12

April purchases 5000 14

June purchases 5000 16

Sold during 2019 19000

You are require to answer the following (no calculations are necessary):

a)In light of US-GAAP, what are your key observations regarding cost of inventory balance and units sold?

b)What are the potential consequences of current inventory management on profitability and availability of inventory?