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Question 2 a) The following data of purchases and sales for the month of October...

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Question 2 a) The following data of purchases and sales for the month of October 2020. Pfitzer Clan Bhd Date Purchases October Quantity No. Price per unit (RM) Quantity No. Sales Price per unit (RM) 1,000 1,000 1.00 1.02 1.200 1.70 1 4 6 12 15 18 25 400 1.05 1,000 1.90 800 1.10 800 2.00 The inventory is to be used in the new production. Since the inventory is new to the company. management has not yet decided on the valuation of stock. Suggest to the management which valuation method is the best to be used by the company. Required: i. Prepare valuation sheet using FIFO (first in, first out) method. (12 marks) ii. Prepare valuation sheet using AVCO (weighted average cost). (8 marks) iii. Compare the GROSS PROFIT derived from FIFO method and AVCO method (5 marks) iv. Indicate the valuation that is suitable to be applied. (1 mark) V. LIFO (Last in, first out) method is not allowed under IFRS. Discuss. (4 marks) (30 marks) -END OF QUESTIONS

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