ABC Company uses the retail inventory method to value its inventory for financial reporting purposes The company has compiled the following cost and retail sales data for 20X1 Cost Retail Starting Inventory 7 000 000 10 000 000 acquisitions 12 800 000 15 000 000 Clear Markups 2 000 000 Net Discounts 1 000 000 net sales 12 000 000 1) If ABC wants to approximate the average cost of its inventory, determine the best estimate 2) If ABC wants to approximate the lower value of cost or market, determine the best estimate

Question: ABC Company uses the retail inventory method to value its inventory for financial reporting purposes. The company has compiled the following cost and retail sales

ABC Company uses the retail inventory method to value its inventory for financial reporting purposes. The company has compiled the following cost and retail sales data for 20X1.

	Cost	Retail
Starting Inventory	7.000.000	10.000.000
acquisitions	12.800.000	15.000.000
Clear Markups		2.000.000
Net Discounts		1.000.000
net sales		12.000.000

1) If ABC wants to approximate the average cost of its inventory, determine the best estimate.

2) If ABC wants to approximate the lower value of cost or market, determine the best estimate.

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