Page $4$

Question $4(20$ marks$)$

Rochelle Green, the Senior Accountant of Toptech Solutions Inc. is reviewing the work of the Junior Accounts Officer for the month of January $2023,$ and noted that there were several errors. The following information was provided by the Junior Accounts Officer.

Toptech Solutions Inc.

Income Statement

As at January $31,2023$

$\backslash$table$[[$Sales $($net$),90,000],[$Cost of Goods Sold,$57,500],[$Gross Profit,$50,000],[$Total Expenses,$20,000],[$Retained Earnings,$70,000]]$

Additional information available

The beginning inventory at January $1,2023$ was $200$ units, at a cost of $$220$ per unit.

Purchases on January $5,2023$ were $140$ units, at a cost of $$225$ each, and purchases on January $17,2023$ were $150$ units, at a cost $$230$ each

The Company sold $225$ units during January $2023$ at a price of $$400$ each The Company uses the First$-$In First$-$Out $($FIFO$)$ inventory cost flow method with a periodic inventory system.

Required

a$.$ Prepare a corrected Income Statement for the month $($show all computations$)$

$(10$ marks$)$

b$.$ Assume that the Company uses the Last$-$In First$-$Out $($LIFO$)$ inventory flow method, prepare the Income Statement for the month using this inventory flow method $($show all computations$)$

$(6$ marks$)$

c$.$ Exnlain the maior differences between the periodic and perpetual inventory systems. $(4$ marks$)$