Question $3$

B$.$O$.$Ring Ltd trades in a single product and maintains a perpetual inventory.

The company has valued its inventory on the LIFO basis, but is now

proposing to change to the FIFO method.

Their records disclose that the opening inventory of $2,000$ units

of the current period were valued at a price at $2\mathrm{.}30.$

The following transactions took place in the period ${15}^{th}$ July $2023$ to ${15}^{th}$ October

$2023$:

You are required to:

$($a$)$ Calculate what the closing inventory valuation will be at ${15}^{th}$ October $2023$

using:

$(1)$ The LIFO method

$(2)$ The FIFO method

$($b$)$ Outline Two advantages and Two disadvantages of the FIFO

method.