The information below relates to barrels of oil held in the inventory of Olsen’s Ltd during 2019.

Owing to an oil glut, the net realisable value for a barrel of the same grade of oil was $40 per barrel on 31 December 2019. In 2020, the company disposed of the 15 000 barrels of oil in the ending inventory for $600 000. No additional purchases were made in 2020. Olsen’s Ltd uses a periodic inventory system and the average cost flow method. Ignore GST.

Required

Complete the partial income statements for 2019 and 2020 shown below under the average cost flow method and the lower of cost and net realisable value rule.

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Beginning inventory Purchases Jan. 1 April 15 May 13 Aug. 9 Sales ($52 per barrel) Purchases Oct. 28 Sales ($52 per barrel) Barrels 30 000 40 000 (50 000) 35 000 (40 000) Unit cost $44 44 44