P6.4B (LO 2, 3) Big Fish Tackle Co. Ltd. reports the following inventory transactions for its fishing rods for the month of April. The company uses a perpetual inventory system. Date Explanation Apr. 1 Beginning inventory 50 Instructions Units Unit Cost/Price Total Cost $230 $11,500 6 Purchases 35 240 8,400 9 Sales (55) 350 14 Purchases 40 245 9,800 20 Sales (50) 360 28 Purchases 30 250 7,500 a. Using FIFO, determine the cost of goods sold and the cost of ending inventory. b. Record journal entries for the sales transactions on April 9 and April 20. c. Assume that Big Fish Tackle wants to change to the average cost formula. Explain what guidelines the company must consider before making this change. d. If the company does change to the average cost formula and prices continue to rise, explain whether you expect the cost of goods sold and ending inventory amounts to be higher or lower than these amounts when using FIFO. Apply perpetual average cost and discuss errors