The following information relates to the inventory of the ‘Coffee Bean’, a retail business that sells speciality coffee. A summary of the transactions for coffee beans are presented below for the month of June. Ignore GST.

The Coffee Bean has adopted the periodic inventory system for recording inventory. Sales totalled 35 650 units of coffee tea at a sales value of \($213\) 900. A physical stocktake at the end of June confirmed 8 000 units of coffee beans were on hand. Note, round to the nearest dollar.
Required

(a) Prepare a Statement of Profit or Loss to calculate the gross profit for the month of June using each of the following costing methods:
i. specific identification, assuming that 9 500 units were sold from the beginning inventory, 6 500 units were sold from the first purchase, 5 000 units were sold from the 13 June purchase, 7 400 units were sold from the purchase on the 25 June and the remainder from the 30 June purchase.
ii. FIFO iii. LIFO iv. weighted average.

(b) Which cost flow method(s) resulted in the highest gross profit on sales? the highest ending inventory? Explain your results.

(c) Prepare a Statement of Profit or Loss to calculate the gross profit for June, using the FIFO and LIFO costing methods on the assumption that the purchase on 30 June did not arrive until the first week in July.

(d) The management of the Coffee Bean has been notified the unit cost of imported coffee beans are expected to increase to \($6.95\) towards the end of July due to an increase in customs duties. In anticipation of the price increase, a purchase of 12000 additional units of coffee beans were made on 30 June at a unit cost of \($6.30\). The invoice terms were EXW. Considering this information, prepare a Statement of Profit or Loss down to gross profit for June, using the FIFO and LIFO costing methods.

(e) Compare your results obtained in requirements A, C and D. Explain why your results are or are not the same.

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Date Details Units Unit Cost Total June 1 Beginning Inventory 12 000 $ 5.30 $ 63 600 8 Purchase 7 500 5.50 41 250 13 Purchase 6 000 5.60 33 600 25 Purchase 8 950 5.80 51 910 29 Purchase 9 200 6.30 57 960 Total 43 650 $ 248 320