Zippy Machines Ltd is in the business of procuring a specific type of machine and sells them to international markets.
During the year, the Zippy Machines Ltd bought four machines costing R120,000, R140,000, R130,000 and R100,000 respectively.
During the year it sold only one machine for R140,000 and follows the FIFO method of valuation.
Which of the following statements is TRUE?
a.
The cost of Inventory is R370 000 and the cost of sales is R100 000.
b.
The cost of Inventory is R390 000 and the cost of sales is R140 000.
c.
The cost of Inventory is R370 000 and the cost of sales is R120 000.
d.
The cost of Inventory is R370 000 and the cost of sales is R490 000.