The management of Whispering Instrument Company had concluded, with the concurrence of its independent auditors, that results of operations would be more fairly presented if Whispering changed its method of pricing inventory from last-in, first-out (LIFO) to average-cost in 2017. Given below is the 5-year summary of income under LIFO and a schedule of what the inventories would be if stated on the average-cost method.

Prepare comparative statements for the 5 years, assuming that Whispering changed its method of inventory pricing to average-cost. Indicate the effects on net income and earnings per share for the years involved. Whispering Instruments started business in 2012. (Enter amounts that decrease cost of goods sold using either a negative sign preceding the number e.g. -15,000 or parentheses e.g. (15,000). Round all amounts except EPS to the nearest whole dollar, e.g. 5,275. Round Earnings Per Share to 2 decimal places, e.g. 1.62. Round up the tax effects to the next whole dollar.)

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WHISPERING INSTRUMENT COMPANY STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEARS ENDED MAY 31 2013 2014 2015 2016 2017 Sales-net Cost of goods sold $14,040 $15,400 $16,760 $18,110 $18,820 Beginning inventory Purchases Ending inventory 990 1,120 1,250 13,070 13,840 14,960 15,960 17,634 1,000 1,090 (1,090) (990) (1,120) 1,250) (1,380) Total Gross profit Administrative expenses Income before taxes Income taxes (50%) Net income Retained earningsbeginning 1,20 Retained earnings-ending Earnings per share 12,980 13,940 14,830 15,830 17,504 1,316 900 000 316 158 158 2,990 $1,405 $1,755 $2,300 $2,990 $3,148 $1.85 $3.50 $5.45 $6.90 $1.58 1,460 760 700 350 350 1,405 1,930 2,280 1,060 690 370 185 185 840 1,090 545 545 1,380 690 690 1,755 2,300 SCHEDULE OF INVENTORY BALANCES USING AVERAGE-COST METHOD FOR THE YEARS ENDED MAY 31 2012 2013 2014 2015 2016 2017 $1,010 $1,110 $1,090 $1,270 $1,510 $1,740 WHISPERING INSTRUMENT COMPANY Statement of Income and Retained Earnings For the Years Ended May 31 2013 2014 2015 2016 2017 Sales-net Cost of goods sold Beginning inventory Purchases Ending inventory Total Gross profit Administrative expenses Income before taxes Income taxes Net income Retained earnings-beginning As originally reported Adjustment As restated Retained earnings-ending Earnings per share WHISPERING INSTRUMENT COMPANY STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEARS ENDED MAY 31 2013 2014 2015 2016 2017 Sales-net Cost of goods sold $14,040 $15,400 $16,760 $18,110 $18,820 Beginning inventory Purchases Ending inventory 990 1,120 1,250 13,070 13,840 14,960 15,960 17,634 1,000 1,090 (1,090) (990) (1,120) 1,250) (1,380) Total Gross profit Administrative expenses Income before taxes Income taxes (50%) Net income Retained earningsbeginning 1,20 Retained earnings-ending Earnings per share 12,980 13,940 14,830 15,830 17,504 1,316 900 000 316 158 158 2,990 $1,405 $1,755 $2,300 $2,990 $3,148 $1.85 $3.50 $5.45 $6.90 $1.58 1,460 760 700 350 350 1,405 1,930 2,280 1,060 690 370 185 185 840 1,090 545 545 1,380 690 690 1,755 2,300 SCHEDULE OF INVENTORY BALANCES USING AVERAGE-COST METHOD FOR THE YEARS ENDED MAY 31 2012 2013 2014 2015 2016 2017 $1,010 $1,110 $1,090 $1,270 $1,510 $1,740 WHISPERING INSTRUMENT COMPANY Statement of Income and Retained Earnings For the Years Ended May 31 2013 2014 2015 2016 2017 Sales-net Cost of goods sold Beginning inventory Purchases Ending inventory Total Gross profit Administrative expenses Income before taxes Income taxes Net income Retained earnings-beginning As originally reported Adjustment As restated Retained earnings-ending Earnings per share