QUESTION 1

a. Why in your opinion did Julias accountantrecommend the average cost method?

b. Name and explain the main characteristics of the 3methods of valuation of the inventory.

c. Explain the consequences each valuation methodmay have on the valuation of the inventory inthe above scenario and the determination of thenet income in case of price fluctuation

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