Carmel Department Store uses the retail inventory method. On December 31, 2013, the following information relating to

Question:

Carmel Department Store uses the retail inventory method. On December 31, 2013, the following information relating to the inventory was gathered:
_______________________________________________________Cost.............Retail
Inventory, January 1, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 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 value at December 31, 2013, using the:
1. Average cost method
2. Lower-of-cost-or-market method
Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...