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Assignment II Stock-in-Trade Ltd is a retailing company. It reported the following information regarding its stock (inventory) and sales: Opening stock on November 1 was 300 units valued at $12 each. Sales (units sold) Receipts (units purchased) 400 at $12.50 per unit November 10 November 14 500 sold at $20.00 per unit November 20 400 at $14.00 per unit November 21 500 sold at $20.00 per unit November 25 400 at $15.00 per unit November 28 100 sold at $20.00 per unit . Required a. Using the information provided above and the following methods of stock valuation: FIFO LIFO Show: i. The cost of each batch of issues (sales) ii. The total cost of issues for the month iii. The value of closing stock on Nov 30 iv. Calculate the profit from selling this stock item in November b. Assuming inflation explain, with examples, the impact of FIFO and LIFO on reported profit in the Income Statement (Profit and Loss Account) as well the valuation of inventory in the balance sheet. c. Explain, with examples, what is meant by the "Lower of Cost or Market Rule" or LCM in inventory valuation. Explain with numerical examples how the application of the LCM Rule affects the Balance Sheet and the Income Statement? You must also explain the role of the governing fundamental accounting concepts/principles in this context. d. Using a simple numerical example explain how an "Aged Analysis of Accounts Receivable may be used to estimate how much the Allowance for Doubtful Accounts should be. Your answer must also identify and explain in context, the fundamental accounts concepts/principles that govern the treatment of doubtful accounts. Note: Doubtful Accounts are also called Doubtful Debts

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