QUESTION FiVE Mugs ltd trade in a single product caled 'yeliow label' and maintains a perpetual inventory system. The company is currently valuing its etock on LIFO basis brt is now proposing to change to the FIFO method. The company records dizclose that 2,000 unis were in stock at the beginning of the current period, and valued cn the basis of a receipt of 5,c00 units priced at K2.50 per urit of which 4,000 had been sold bsiore the end of the period, pius s00 from a delivery ir 1989 when the cosi was K2.00 per urit, plus 500 purchased in 1978 when the cos! was K0.50 per unit. The folowing transactions took piace during the current period of Jaruary 2000 tc june 2000 January Sold 1,500 units at K4.00 each. February received 10,000 urils at K2.50 each MarchSold 8,000 units at K4.Co each April May June Rcquired: Received 15,000 units at K2.70 eaci Received 6,500 units at K2.70 each Sold 22,000 units at K4,00 each. (aj Calculate the inventory valuation at 30 June 2000 using LIFO method (i) WAC (5 marks) FIFO Method valuation of opening and dasing inventory and reconcile the two profits (8 marks) stock vauaion (b) Ca'cuiate the trading prcfit for the period under review using above matheds of (c) Acvise the conparay on its proposal to charnge from LIFO to FIFOo methods of (2 Marks) [Total 25 Marks)