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Question 1 (30 marks) Carlton Company ("Carlton'), an import and export company, applies the perpetual inventory system and the first-in-first-out method for its inventory transactions. The credit terms of [2/10, n/30) are offered to its customers. Carlton made the following merchandising transactions in May 20X0: 1 May Purchased 150 cameras from Taylor Company for $180,000; invoice dated 1 May. 2 May Purchased 220 cameras from Lantern Company for $242,000. 3 May Received a $7,200 credit memorandum from Taylor Company for the return of six of the items purchased on May 1. 5 May Sold 300 cameras to Bumble Limited for $450,000. 6 May Paid Lantern Company the balance due. 8 May Sold 50 cameras to Nat Company for $85,000. 11 May Paid Taylor Company the balance due. 13 May Received the balance due from Bumble Limited within the discount period. 14 May Issued a $3,400 credit memorandum to Nat Company for an allowance for defective cameras. 17 May Received the balance due from Nat Company within the discount period. Required: a Calculate the cost of goods sold of Carlton for May 20X0, assuming no inventory is noted in the beginning of May 20X0. (9 marks) b Calculate the gross profit of Carlton according to the information provided. (6 marks) c Re-calculate parts (a) and (b) if Carlton applies the weighted average method for its inventory transactions, and Bumble Limited settled the amount on 31 May 20X0. (15 marks)

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