Question 4 (10 marks) You will have the responsibility to become an expert on one inventory methods (Weighted Average Costing) under the perpetual method. Using the following data, you must show and illustrates the relevant concepts and procedures for your inventory method. You must write the illustration in a format that is clear and understandable with the steps and details. Data The company uses a perpetual inventory system. It had the following beginning inventory and current year purchases of its product. Jan. 1 Jan. 14 Apr. 30 Sept. 26 Beginning inventory Purchase Purchase Purchase 50 units @ RO. 10 = RO. 500 170 units @ RO. 12 - RO. 2,040 180 units @ RO. 15 = RO. 2,700 300 units @ RO. 20 = RO. 6,000 The company sales were on the following dates at a RO. 35 per unit sales price. Jan. 10 30 units (specific cost: 30 @ RO. 10) Feb. 15 100 units (specific cost: 100 @RO. 12) Oct. 5 350 units (specific cost: 100 @ RO. 15 and 250 @ RO 201. Concepts and Procedures to Illustrate in your answer/illustration: i. Identify and compute the costs assign to the units sold. (Round per unit costs to three decimals). (4 Marks) ii. Identify and compute the costs assign to the units in ending inventory. (Round inventory balances to the dollar). (2 Marks) How likely is it that this inventory costing method will reflect the actual physical flow of goods? Explain. (1.5 Marks) iv. What is the impact of this method comparing to others in determining net income and income taxes? (1 Mark) How closely does the ending inventory amount reflect replacement cost (current market cost)? (1.5 Marks) v. Question 3 (5 +5 = 10 Marks) a) XYZ Company has purchased goods for RO 20,000 from Rahima. The following are possible errors that the accountant may commit: i. The transaction was not recorded. ii. Were recorded as RO 25,000 The transaction was not posted to her account iv. Were posted to her account as RO 2,000 V. Were posted to Rashid s account You are required to rectify all the above errors separately. b) If costs are declining, will the LIFO or FIFO method of inventory valuation yield the lower cost of goods sold? Justify and explain three merits of the method selected. Page 3 of 6