Cost Beginning Inventory $200,000 Chapter 8 Problem 1 (5 pts): Reese Department Store uses the retail inventory method. Inventory data are as BI follows: Retail $250,000 Markups Retail +P $195,000 CGA Sales Purchases 1,000,000 1,600,000 Markup Cancellations 1,562,500 Markdowns 20,000 EI 120,000 COGS Markdown Cancellations 10,000 Spoilage is normally 1.25% of sales. A. Compute estimated ending inventory using the lower of market or average cost. B. Compute estimated ending inventory using FIFO.