Winter Warmers Ltd sells one type of luxury blanket and uses a perpetual inventory system. During October the following purchases and sales were made:

1 October Purchased 10 blankets for $125 per unit

5 October Purchased 15 blankets for $127 per unit

15 October Sold 12 blankets

20 October Purchased 40 blankets for $130 per unit

27 October Sold 20 blankets

Required:

a. Calculate the cost of sales and closing inventory under the FIFO method

[5 marks]

b. Calculating the cost of sales and closing inventory under the weighted average method.

[5 marks]