You import and sell surgical gloves. Recently, prices have changed dramatically. Below is a record of purchases and sales of boxes of gloves for the most recent three months of this year.
|Date||Purchase/sale price per box (£)|
|4 February||Received||15,000 boxes||£8|
|15 February||Sold||17,000 boxes||£10|
|3 March||Received||30,000 boxes||£11|
|7 March||Sold||35,000 boxes||£13|
|24 March||Sold||6,000 boxes||£15|
|3 April||Received||30,000 boxes||£13|
|10 April||Sold||35,000 boxes||£17|
You had 20,000 boxes of gloves in stock at the beginning of February, which are valued at £7.50 per box. Other business expenses amount to £7,800 per calendar month, which you pay as they arise.
- Calculate both the cost of sales and the closing inventory for the last three months using (i) FIFO; (ii) LIFO; and (iii) AVCO stock flow assumptions.
- Calculate your profit for this period using each of the three stock flow
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