Under SFAS 154, when the period specific effects of a change in accounting principle can be determined, the cumulative effect of the change in the period is applied in that period directly to assets and liabilities and offset to beginning retained earnings for that period. Your approach would be correct if you could not determine the period specific effects but could determine the cumulative effect on all periods; in this circumstance, the cumulative effect of the change is applied to the earliest period for which the effects can be determined and offset to retained earnings.

So in 1987, the assets/liabilities would be adjusted for the effect in 1987. The assets/liabilities (Inventory, in this case) would be adjusted for 9,000, and beginning retained earnings would be offset. Same goes for 1988, and 1989. Unless the period specific effects cannot be determined (which is not the case here), you apply the change in the period of the change directly to assets/liabilities in the year of the change. Therefore in 1989, the beginning retained earnings should be adjusted only for the effect on 1989s assets and liabilities (-5000).