Question 4 (4 Marks)

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):

1. In light of US-GAAP, what are your key observations regarding cost of inventory balance and units sold? (2 marks)
2. What are the potential consequences of current inventory management on profitability and availability of inventory?