Both the management of Kimmel Instrument Corporation, a small company that follows IFRS and its independent auditors recently concluded that the company€™s results of operations will have greater predictive value in future years if Kimmel changes its method of costing inventory from FIFO to average cost. The following data are a five-year income summary and a schedule of what the inventories might have been if they had been stated using the average cost method.

Instructions
(a) Prepare comparative statements for the five years that would be suitable for inclusion in the historical summary portion of Kimmel€™s annual report, assuming that Kimmel had changed its inventory costing method to average cost in 2011. Indicate the effects on net income and earnings per share for the years involved. (All amounts except EPS are rounded up to the nearest dollar.)
(b) Prepare the statement of retained earnings for 2011, with comparative statements for 2010 and 2009 to be issued to shareholders, assuming retrospective treatment.
(c) Identify all balance sheet accounts that require restatement on the comparative May 31, 2010 and 2009 balance sheets issued to shareholders in 2011.
(d) Assume that the data for the years 2006 to 2010 were not available. Briefly explain how to account for this inability to apply full retrospective application under both ASPE and IFRS, and prepare the statement of retained earnings for 2011, with a comparative statement for 2010 to be issued to shareholders as an illustration to aid in the explanation.

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KIMMEL INSTRUMENT CORPORATION Statement of Income and Retained Earnings for the Years Ended May 31 2007 2008 2009 2010 2011 Sales -net $13,964 $15,506 $16,673 $18,221 $18,898 Cost of goods sold 1,000 13,000 (1,100) 12,900 1,064 700 364 182 182 1,206 $ 1,388 1,237 17,100 1,369) 16,968 1,930 989 941 471 470 3,005 3,475 Beginning inventory 1,000 1,115 15,900 (1,237) 15,778 2,443 907 1,536 768 768 2,237 $3,005 1,100 13,900 (1,000) 14,000 Purchases 15,000 Ending inventory 4,885 1,788 Total Gross profit Administrative expenses Income before taxes incorna taxes (50% Net income Retained earnings beginning Retained earnings -ending 1,506 763 743 372 832 956 478 371 1,388 $1,759 478 1,759 $ 2,237 $ 4.78 Earnings per share $1.82 $ 3.71 $ 7.68 $ 4.70 KIMMEL INSTRUMENT CORPORATION SCHEDULE OF INVENTORY BALANCES USING AVERAGE COST METHOD Year Ended May 31 2006 2007 2010 2008 $1,091 2009 2011 $950 $1,124 $1,270 $1,480 $1,699