The following data is available for the month of September for two items of inventory that might

soon be render obsolete for Island Solutions.

Inventory balances at September $1,2023,$ were as follows:

USB$-$C $($TA$3)$ Hub $200$ @ $$400$ ea$.$

USB$-$C $($TB$3)$ Hub $600$ @ $$800$ ea$.$

USB$-$C $($TA$3)$ HUB USB$-$C $($TB$3)$ HUB

Date Purchases Sales Date Purchases Sales

Sep $5500$ @ $$450$ Sep $10600$ @ $$900$

$10500$ @ $$54019300$ @ $$950$

$15400$ @ $$47525900$ @ $$1080$

$20400$ @ $$57028500$ @ $$1000$

$25300$ @ $$50030600$ @ $$1140$

$3$

a$.$ Assume that Island Solutions uses a periodic inventory system under the FIFO method,

determine the cost of ending inventory and cost of goods sold at September $30,2023,$ for

the individual items and in total. $($Show all workings$)16\mathrm{.}5$ m

b$.$ Assume that Island Solutions uses a periodic inventory system under the average cost

method, determine the cost of ending inventory and cost of goods sold at September $30,$

$2023,$ for the individual items and in total. $($Round to $2$ decimal places$)30$ m

$3.$ What is the purpose of the current ratio? Assume that Island Solutions want to compute its

current ratio, which inventory method $($FIFO or Average Cost$)$ would give a more meaningful

current ratio. Explain. $3$ m

$4.$ Island Solutions has discovered that all of its competitors are using another inventory method

and is worried. Can the company change its inventory accounting method, on what grounds?

Discuss two $(2)$ trade$-$offs for the company.