Question $2(15$ marks$)$

The Winds trading company discloses the following information for the month of August $216.$

Aug. $01$: Beginning inventory, $600$ units @ $$5$ each.

Aug. $10$: Sold $400$ units @ $$12$ each.

Aug. $11$: Purchased $1,600$ units @ $$6$ each.

Aug. $15$: Sold $1,000$ units @ $$12\mathrm{.}50$ each.

Aug. $20$: Purchased $1,000$ units @ $$6\mathrm{.}50$ each.

Aug. $27$: Sold $600$ units @ $$13\mathrm{.}50$ each.

Required:

Answer the following independent questions and show computations supporting your answers.

Assume that the company uses the FIFO method. Calculate cost of goods sold and ending inventory at August $31.$

$(4$ marks$)$

Assume that the company uses the Average cost method. Calculate cost of goods sold and ending inventory at August $31.$

$(4$ marks$)$

Assume that the company uses the LIFO method. Calculate cost of goods sold and ending inventory at August $31.$

$(4$ marks$)$

Determine the difference in the amount of income that the company would have reported if it had used the FIFO method instead of the LIFO method.

$(3$ marks$)$