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Question 3: (20 minutes). (15 marks): Manchester Company merchandises a single product called ABC and uses a periodic inventory system. The ending inventory at the end of 2017 totaled 50,000 units and were valued using the average cost method at $5 per unit (Hint: This is the beginning inventory in 2018) The following data represent purchases of ABC during 2018: January purchases, 80,000 units at $6 March purchases, 100,000 units at $7.40 May purchases, 100,000 units at $8.60 July purchases, 200,000 units at $9.80 September purchases, 50,000 units at $10.60 November purchases, 20,000 units at $11 Additional information: Sales of ABC during 2018 totaled 400,000 units (200,000 were sold during the first half of the year at a selling price $11.5 per unit, and the remaining 200,000 were sold during the second half of the year at a selling price $12 per unit). . Selling expenses during 2018 totaled $ 120,000 . General & Administrative expenses during 2018 totaled $ 200,000 Required: 1. Calculate the Sales revenue for 2018. (1 mark) 2. Calculate the cost of Goods Sold and Cost of Ending Inventory for 2018 using the average cost method. (10 marks) 3. Prepare an Income Statement for the year ending 2018. (3 marks). 4. Report Inventory on the December, 2018 Statement of Financial Position(1 mark). Page 5 of 5

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