Cost flow assumptions The BabyStyle Company is a retail firm buying and selling a single product: prams for babies. A system of perpetual inventory is employed. During the six months ended 30 June...

Cost flow assumptions The BabyStyle Company is a retail firm buying and selling a single product: prams for babies. A system of perpetual inventory is employed. During the six months ended 30 June 2019 the inventory activity was as follows: Purchases January commenced business, buying 20 units at $5 per unit March 30 units at $6 per unit May 35 units at $7 per unit Sales February 15 units at $10 per unit April 30 units at $11 per unit June 30 units at $12 per unit 1 Calculate the COGS for the six months and the closing balance of inventory, assuming: a LIFO b FIFO c Moving average. 2 What is the gross profit for the period, assuming: a LIFO? b FIFO? c Moving average? 3 Briefly describe a cost-based inventory valuation method other than LIFO, FIFO or Weighted/Moving average cost. 4 Compare the effects of LIFO and FIFO on balance sheet valuation of inventory and net profit in periods of: a rising prices b falling prices.