grade 12 accounting

PART B: Inventory (Thinking) - 9 marks King Company uses the perpetual inventory system and the average cost formula. The following information is available for the month of December: Date Explanation Units Unit Cost Dec 1 Beginning Inventory 200 $10 Dec 15 Purchase 300 $11 Dec 17 Sale 250 ? Dec 26 Purchase 400 $12 Prepare a schedule to show the cost of goods sold and the value of the ending inventory for the month of December (7 marks) Purchases Cost of Goods Sold Balance Date Units Cost Total Units Cost Total Units Cost Total Dec 1 200 $10 Dec 15 | 300 $11 Dec 17 250 Dec 26 400 $12 Why would a company like King Company choose to use the average cost formula over FIFO? To discuss, you can compare/contrast the two inventory cost methods (2 marks)