Exquisite Jewellers purchases chiming clocks from around the world for sale in Canada. According to its records, Exquisite Jewellers had the following purchases and sales of clocks in the current year:

Exquisite Jewellers has used the average cost method to calculate its cost of goods sold and inventory balances, but is thinking of changing to specific identification. The company calculates an average cost by adding all of the purchases together and dividing by the number of clocks purchased.
Required:
a. Compare the dollar amounts that would be reported as the cost of goods sold and ending inventory under the average cost and specific identification methods.
b. Is average cost an appropriate method to use in this situation? Explain.
c. What conditions generally must exist for specific identification to be used? Explain.
d. Which of the two methods best represents the operating results for Exquisite Jewellers? Explain.

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Date AmountSold Sale Clock No. 423 424 425 426 427 428 Date Purchased Paid 2,150 March 8 4,500 4,40016 2.400 August 9 3,720 Price $3,800 January 5 March 15 May 27 July 14 October 24 December 5 ,930 December 24 2.640 6,200 3,350