ABC Company uses the retail inventory method to value its inventory for financial reporting purposes. The company
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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 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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