Julia has recently opened a dry fruits wholesale company dedicated to the sale of peanuts, almonds and pistachios

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Julia has recently opened a dry fruits wholesale company dedicated to the sale of peanuts, almonds and pistachios. The company's name is "The Nuthouse".The Nuthouse was founded during 2020. Julia's passion, longevity and wealth of knowledge in the industry led to The Nuthouse expanding rapidly, creating a network of partners that spans farming operations in the key growing territories of South Africa, Australia, Kenya, Malawi, Zimbabwe, Mozambique and Brazil. During February, its first month of activity, The Nuthouse made the following transactions: Kg Price per Kg Amount February 1: Purchase of stock Purchase of Pistachios 3 000 $11 $33 000 Purchase of Almonds: 4 500 $6 $27 000 Purchase of Peanuts: 6 500 SA $26 000 February 2: Purchase of stock Purchase of Pistachios 2 000 $13 $26 000 Purchase of Almonds: 2 500 $7 $17 500 Purchase of Peanuts: 3 000 $15 000 February 4: Sold to several clients Sale of Pistachios: 2 500 $21 $52 500 Sale of Almonds: 3 000 $12 $36 000 Sale of Peanuts: 3 500 $8 $28 000 February 5: Sold to Fruits Lovers Inc. Sale of Pistachios: 1 000 $21 $21 000 Sale of Almonds: 1 500 $12 $18 000 Sale of Peanuts: 2 000 $9 $18 000 February 11: Purchase of stock Purchase of Pistachios 2 000 $15 $30 000 Purchase of almonds: 2 500 $22 500 February 12: Sale to Peanuts Lovers Inc. Sale of Peanuts: 4 000 $9 $36 000 February 13: Purchase of stock Purchase of Peanuts 6 500 $5 $32 500 February 18: Sold to several clients Sale of Pistachios: 1 500 $22 $33 000 Sale of Almonds: 2 000 $14 $28 000 Sale of Peanuts: 3 500 $10 $35 000 February 24: Purchased from various suppliers Purchase of Pistachios: 1 500 $14 $21 000 Purchase of Almonds: 1 500 $10 $15 000 Purchase of Peanuts: 1 500 $5 $7 500 Over and above these transactions, the company has had the following expenses: Salaries $5 650 Electricity bill $560 Rental expense: Equipment $1 150 Rental expense: Warehouse and c $1 550 Miscellaneous expenditure $1 050 Rental income: Subletting of office $2 500 Queestion 1 a. Name and explain the main characteristics of the 3 methods of valuation of the inventory. b. Explain the consequences each valuation method may have on the valuation of the inventory in the above scenario, and the determination of the net income in case of price fluctuation Question 2 Prepare an Income statement of the company at the end of February for each one of the products sold by Julia using the following methods of valuation of the inventory: You can ignore all tax consequences. 1. The average cost method 2. FIFO method and Calculate the balances of the inventory at the end of the month for each valuation method and pro- vide explanations of the calculations. Question 3 In order to compare with the records made by her accountant, Julia asks you to prepare the journal en- tries for all the purchases and sales of the products using the FIFO method valuation.