Anna started a picture framing business on 1 July 20X3. The following transactions occurred in the six months ended 31 December 20X3:

Additional information
1. On 1 July 20X3 Anna started the business by putting £10,000 into the bank account.
2. Two months' credit is taken from suppliers.
3. One month's credit is given to customers.
4. Expenses of £1,400 are paid each month as incurred.
Required
Calculate the value of closing inventory using the first in, first out (FIFO) method and the average cost (AVCO) method.
Prepare extracts from the statement of profit and loss for the six months to 31 December 20X3 and the statement of financial position at that date, to show the presentation of the above information, for each cost flow assumption used to value inventories?

Transcribed Image Text:

Purchoses Soles 20/07003 25/080x3 15/1103 150 unils al £20 eoch 8/OP/X3 225 units at £30 each 02/10/03 410 units at 2012/3 305 units at £45 eaclh 50 units at £45 each 100 units at £75 each