The following information has been extracted from the records of Steven’s Stationery about one of its popular products. Steven’s Stationery uses the perpetual inventory system. Its annual reporting date is 31 December. Ignore GST.

		No. of units					Unit cost
2015
Jan.   1           6 Feb.   5 March  17	Beginning balance Purchases Sales @ $12.00 per unit Purchases		900 400 1000 1100							$7.00 7.05 7.35
April 24 May   4 June 26 Aug. 11 Aug. 19 Sept. 11 Oct.    6 Dec. 11	Purchases returns Sales @ $12.10 per unit Purchases Sales @ $13.25 per unit Sales returns @ $13.25 per unit Sales @ $13.50 per unit Purchases Sales @ $15.00 per unit		80 700 8400 1800 20 3500 500 3100							7.35 7.50 8.00

Required

A. Calculate the cost of inventory on hand at 31 December 2015 and the cost of sales for the year ended 31 December 2015, assuming:

• The FIFO cost flow assumption
• The moving average cost flow assumption (round average unit costs to the nearest cent, and total cost amounts to the nearest dollar).

B. Prepare the income statement to gross profit for the year ended 31 December 2015, assuming:

• The FIFO cost flow assumption
• The moving average cost flow assumption