Explain the consequences each valuation method may have on the valuation of the inventory in the above scenario and the determination of the net income in case of price fluctuation on the below page

BUSINESS CASE (100 points) Julia has recently opened a dry fruits wholesale company dedicated to the sale of peanuts, almonds and pistachios. The company's name is "The Nuthouse". The Nuthouse was founded during 2020. Julia's passion, longevity and wealth of knowledge in the industry led to The Nuthouse expanding rapidly, creating a network of partners that spans farming operations in the key growing territories of South Africa, Australia, Kenya, Malawi, Zimbabwe, Mozambique and Brazil. THE NUTHOUSE Since 2020 The processing factories surpass global food safety standards and are equipped with state of the art technology During February, its first month of activity, The Nuthouse made the following transactions: kg Price per kg Amount February 1: Purchase of stock Purchase of Pistachios Purchase of Almonds: Purchase of Peanuts: 3 000 4 500 6 500 $11 $6 $4 $33 000 $27 000 $26 000 February 2: Purchase of stock Purchase of Pistachios Purchase of Almonds: Purchas of Peanuts: 2 000 2 500 3 000 $13 $7 $5 $26 000 $17 500 $15 000 February 4: Sold to several clients Sale of Pistachios: Sale of Almonds: Sale of Peanuts: 2 500 3 000 3 500 $21 $12 $8 $52 500 $36 000 $28 000 February 5: Sold to Fruits Lovers Inc. Sale of Pistachios: Sale of Almonds: Sale of Peanuts: 1 000 1 500 2 000 $21 $12 $9 $21 000 $18 000 $18 000 February 11: Purchase of stock Purchase of Pistachios Purchase of almonds: 2 000 2 500 $15 $9 $30 000 $22 500 February 12: Sale to Peanuts Lovers Inc. Sale of Peanuts: 4 000 $9 $36 000 February 13: Purchase of stock Purchase of Peanuts 6 500 $5 $32 500 February 18: Sold to several clients Sale of Pistachios: Sale of Almonds: Sale of Peanuts: 1 500 2 000 $22 $14 $10 $33 000 $28 000 $35 000 3 500 February 24: Purchased from various suppliers Purchase of Pistachios: Purchase of Almonds: Purchase of Peanuts: 1 500 1 500 1 500 $14 $10 $5 $21 000 $15 000 $7 500 Over and above these transactions, the company has had the following expenses: Salaries $5 650 Electricity bill $560 Rental expense: Equipment $1 150 Rental expense: Warehouse and office $1 550 Miscellaneous expenditure $1 050 Rental income: Subletting of office space to Fruity-Loops Inc. $2 500 The company's accountant recommended that they should use the average cost method in order to determine the cost of the inventory sold but he is not sure about the consequences it may have on their financial situation. Valuation Method Consequence on Valuation of Inventory Consequence on Net Income 1. FIFO 2. LIFO 3. AVERAGE COST