QUESTION 2: Date Transaction Units Value 1000 200 1st Jan 31st Jan 15th Feb 26th Feb 14th Mar Receipt Receipt Issue Receipt Issue 400 100 300 150 360 50 Required: a) If the FIFO method of pricing is used, what is the closing inventory valuation on 31st March? Analyse the advantages and disadvantages of this method. (10 marks) b) If the LIFO method of pricing is used, what is the closing inventory valuation on 31st March? Analyse the advantages and disadvantages of this method. (10 marks) QUESTION 3: Noodle V Ltd start business at the 1st of Jan 2021 with share capital of 110,000. They also take a long-term loan of 160,000 and commitment to pay equally 6,900 each month (include interest). The loan interest for the first quarter is 6,000. Sale are expected to be as follows: Jan Feb Mar 240,000 260,000 300,000 60% of sale are for cash. The remainder of sales will be collected 1 month later. To beginning business, Noodle V buy 108,000 and pay 100% in January. Further inventory is purchased at 50% of sales each month. Suppliers are paid 1 month later. The closing inventory should be 135,000. Wages are forecasted to be 20,000 per month, payable in the month they are incurred. Overheads excluding depreciation are forecast to be 40,000 per month and paid in the month they are incurred. Rent is 60,000 per year payable annually in advance. Equipment will be depreciated at 10% of cost per year and company will spend 150,000 on equipment. Required: a) Discuss different types of budgets (Functional budgets & Master budgets) (20 marks) b) Forecast Monthly Cash Flow Statement for the first quarter 2021. (15 marks) c) Forecast Income Statement for the period ending 31th March 2021. (7 marks) d) Forecast Statement of Financial Position as at the 34th March 2021. (8 marks)