Retail Inventory Method
Carmel Department Store uses the retail inventory method. On December 31, 2008, the following information relating to the inventory was gathered:
|
|
Cost |
Retail |
|
Inventory, January 1, 2008 |
$ 26,550 |
$ 45,000 |
|
Sales |
|
430,000 |
|
Purchases |
309,000 |
435,000 |
|
Purchase discounts |
4,200 |
|
|
Freight in |
5,250 |
|
|
Markups |
|
30,000 |
|
Markdowns |
|
40,000 |
|
Sales discounts |
|
5,000 |
Compute the ending inventory value at December 31, 2008, using:
1. the average cost method.
2. the lower of cost or market method.