Brian Ltd starts selling footballs in 20X2 Although each

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Brian Ltd starts selling footballs in 20X2. Although each ball looks the same, the unit cost of
manufacture (which is done in batches) has fluctuated during the period. Details of the costs are
as follows:Details of sales are as follows:The closing inventory was counted on 30 June and
found to be 70 units.Requireda. Calculate the cost of sales for the year ended 30 June 20X3
and detail the value of the closing inventory using the FIFO, LIFO and weighted average
inventory valuation cost flow methods (inventory movement sheets are required).b. Prepare
extracts from the statement of profit and loss for the year ended 30 June 20X3 based on the
three valuation methods - explain why a different profit is reported under each method.c. What
inventory valuation method is not permitted under IAS 2?d. Explain in which circumstances (if
any) it would be appropriate to use the following cost flow assumptions:i. First in first out (LIFO)
assumption;ii. Last in, first out (LIFO) assumption;iii. Specific identification assumption;iv.
Weighted average cost assumption?View Solution:
Brian Ltd starts selling footballs in 20X2 Although each ball

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