Question: Based on the information on the next page, what inventory costing method does CarMax use? Do you believe this method is appropriate? Explain. The asset

Based on the information on the next page, what inventory costing method does CarMax use? Do you believe this method is appropriate? Explain.

The asset side of the 2017 balance sheet for CarMax Inc. is below. Consolidated Balance Sheets - Feb. 28, 2017 Feb. 29, 2016 USD $ in Thousands (excerpts) CURRENT ASSETS: Cash and cash equivalents 38,416 $ 37,394 Restricted cash from collections on auto loan receivables 380,353 343,829 Accounts receivable, net 152,388 132,171 Inventory 2,260,563 1,932,029 Other current assets 41,910 26,358 TOTAL CURRENT ASSETS 2,873,630 2,471,781 Auto loan receivables, net 10,596,076 9,536,892 Property and equipment, net 2,518,393 2,161,698 Deferred income taxes 150,962 161,862 Other assets 140,295 127,678 TOTAL ASSETS $16,279,356 $14,459,911 The asset side of the 2017 balance sheet for CarMax Inc. is below. Consolidated Balance Sheets - Feb. 28, 2017 Feb. 29, 2016 USD $ in Thousands (excerpts) CURRENT ASSETS: Cash and cash equivalents 38,416 $ 37,394 Restricted cash from collections on auto loan receivables 380,353 343,829 Accounts receivable, net 152,388 132,171 Inventory 2,260,563 1,932,029 Other current assets 41,910 26,358 TOTAL CURRENT ASSETS 2,873,630 2,471,781 Auto loan receivables, net 10,596,076 9,536,892 Property and equipment, net 2,518,393 2,161,698 Deferred income taxes 150,962 161,862 Other assets 140,295 127,678 TOTAL ASSETS $16,279,356 $14,459,911

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