Retail Inventory Method The Harmes Company is a clothing store that uses the retail inventory method. The following information relates to its operations during 2007:
|
Cost |
Retail |
|
|
Inventory, January 1 |
$28,400 |
$40,200 |
|
Purchases |
65,200 |
100,000 |
|
Markups (net) |
— |
1,900 |
|
Markdowns (net) |
— |
400 |
|
Sales |
— |
80,000 |
Required
Compute the ending inventory by the retail inventory method for the following cost flow assumptions:
1. FIFO
2. Average cost
3. LIFO
4. Lower of cost or market (based on average cost)