One Stop Electrical Shop are merchandisers of household fixtures & fittings. The business began the last quarter of 2020 (October to December) with 25 Starburst Wall Clocks at a total cost of $153,000. The following transactions took place during the quarter. October 10 October 31 November 1 November 10 November 30 December 2 December 6 December 31 December 31 (B) 100 clocks were purchased on account at a cost of $6,225 each. In addition, One Stop paid $120 cash on each clock to have the inventory shipped from the vendor's warehouse to their warehouse (C) During the month 90 clocks were sold at a price of $8,300 each. (20 of these clocks sold were on account to a long-standing customer of the business) A new batch of 60 clocks was purchased at a total cost of $406,500 5 of the clocks purchased on November 1 were returned to the supplier, as they were damaged The sales for November were 58 clocks which yielded total sales revenue of $498,800 Owing to increased demand, a further 110 clocks were purchased at a cost of $7,400 each and these were subject to a trade discount of 2% each. Unless otherwise stated, assume that all purchases are on account and all sales are for cash. Required: (A) Kimoya Rennie, a customer to whom 8 clocks were sold at the start of the first business day in November, returned 2 of the clocks, as they did not match her specifications. 117 clocks were sold during December at a unit selling price of $9,220. An actual inventory count was carried out which revealed that there were 22 Starburst wall clocks in the store room. Prepare a perpetual inventory record for this merchandise, using the last in, first out (LIFO) method of inventory valuation, to determine the business's cost of goods sold for the quarter and the value of ending inventory. Given that selling, distribution and administrative costs for the quarter were $77,300, $42,105 and $111,830 respectively, prepare an income statement for One Stop Electrical Shop for the period ended December 31, 2020 State the journal entries necessary to record the transactions on October 10 and October 31, assuming the company uses a: - Periodic inventory system - Perpetual Inventory System (D) The owner of the business, Roger Lightfoot, has stated that his objective is to cut back on his tax liability as much as possible and at the same time have his balance sheet looking at its best and is of the view that the LIFO method would be best to achieve both. Do you agree with Roger? Explain your answer clearly distinguishing between the first in, first out (FIFO) and last in, first out (LIFO) methods of inventory valuation, with reference to IAS 2.