Question 4 (15 marks)

The following information relates to the inventory of Cheap Stuff Ltd during May:

May

1 Beginning Inventory 90 units @7

3 Purchased 90 units @8

10 Purchased 110 units @9

12 Sold 90 units

17 Sold 80 units

25 Sold 40 units

Cheap Stuff Ltd uses a perpetual inventory system. Ignore GST.

Required

Determine the cost of the ending inventory (assuming there have been no stock losses) and the cost of sales, using the following methods:

moving average; round unit cost to the nearest cent; and

FIFO

Be sure to clearly state the value of ending inventory and cost of sales obtained under each method