QUESTION 1 The following information has been extracted from the records of Steven's Stationery about one of its popular products. Steven's Stationery uses the perpetual inventory system. Ignore GST. No. of units Unit cost 900 $7.00 400 $7.05 1 000 1020 $7.35 2020 Jan. Beginning balance 6 Purchases Feb. 14 Sales @$12 per unit Mar. 18 Purchases May 21 Sales @$12.10 per unit June 24 Purchases Aug. 27 Sales @$13.25 per unit Sept. 30 Sales @$13.50 per unit Oct. 6 Purchases Dec. 11 Sales @$15.00 per unit 700 8 400 $7.50 1 780 3 500 500 $8.00 3 100 Required: (a) Calculate the cost of inventory on hand at 31 December 2020 and the cost of sales for the year ended 31 December 2020, assuming: i. the FIFO cost flow assumption ii. the moving average cost flow assumption (round average unit costs to the nearest cent, and total cost amounts to the nearest dollar). (b) Prepare a comparative income statement to gross profit for the year ended 31 December 2020, assuming: 1. the FIFO cost flow assumption ii. the moving average cost flow assumption (a) i FIFO Cost assumption: perpetual. Product FIFO Method Purchases Sales Balance Date Particular Unit Unit Unit Total cost Unit Unit Unit cost Total cost Total cost cost cost 1/1 Balance 900 $7.00 $6 300 - TOTAL ii. Moving average method: Perpetual. Purchases Sales Balance Date Particulars Units Unit Units Units Total cost Unit cost Total cost Unit cost Total cost cost TOTAL (b) i&ii Steven's Stationery Income Statement Period ending 31 December 2020 FIFO Moving Average Sales Less: Cost of sales GROSS PROFIT