Question B1

The accounting division of ESKIMO Merchandising International has the following inventory details for the year ending 2020. XYZ sells each unit for $60 and updates inventory records periodically.

Period	Inventory	No of units	Unit cost
1st January	Opening balance	150	35
20th February	Purchase	400	40
15th March	Sold	150
2nd May	Purchase	300	45
30th July	Sold	350
20th November	Sold	120

1. Under the FIFO method, what are the reported cost of sales, gross profit, and ending inventory balances for 2020?

(3 marks)

2. Under the LIFO method, what are the reported cost of sales, gross profit, and ending inventory balances for 2020?

(3 marks)

3. Compare the cost of sales, the ending inventory, the cost of goods available, and the gross profit calculated under each valuation method.

(3 marks)