How does the correntional retail method approximate the lower$-$of$-$cost$-$or$-$market valuation? What is the impact on ending invertory?

How does the conventional retail method approximale the lower$-$of$-$cest$-$or$-$market valuation?

A$.$ Unster the lower$-$of$-$cost$-$or$-$market $($LCM$)$ conventional retail method, net mertups are included but net markdowns are not included in the calculation of the cost$-$lo$-$retail ratio.

B$.$ Under the lower$-$of$-$cost$-$or$-$market $($LCM$)$ conventional retail method, net masups are not included but net markdowns are included in the calculation of the cost$-$lo$-$retail ratio

C$.$ Under the lower$-$of$-$cost$-$or$-$market $($

L$.$CM$)$ conventional retail method, net masups and net mandows are not included in the calculation of the cost$-40-$retail ratio.

D$.$ Under the lower$-$of$-$cost$-$or$-$market $($LCM$)$ conventional retail method, both net markups and net markiowns are included in the calculation of the cost$-$to$-$retail ratio.

What is the impact on ending irrestion?

A$.$ The lower$-$of$-$cost$-$or$-$market $($LCM$)$ correntional retail method produces higher retail numbers in the denominator, lowering the cosi$-45-$retail ratio. As a result, ending invertory is valued more conservatively, approximating LCM. The treatment of net markowns as an immediate write$-$down in value, or as a loss, is also conservalive in nature.

B$.$ The lower$-$of$-$cost$-$or$-$market $($LCM$)$ convertional retail method produces higher retail numbers in the numerator, raising the cost$-$to$-$retail ratio. As a result ending invertory is valued more conservatively, approximating LCM. The treatment of net markdowns as an immediate write$-$down in value, or as a loss, is also conservative in nature.

C$.$ The lower$-$of$-$cost$-$or$-$market $($LCM$)$ conventional retail method produces lower retail numbers in the denominator, raising the cost$/$to$-$retail ratio. As a result, ending inventory is valued less conservatively, approximating LCM. The treatment of net markdowns as an immediate write$-$down in value, or as a loss, is conservative in nature.

D$.$ The lower$-$of$-$cost$-$or$-$market $($LCM$)$ conventional retail method produces lower retail numbers in the numerator, lowering the cost$-$to$-$retail ratio. As a result, ending inventory is valued less conservatively, approximating LCM. The treatment of net markdowns as an immediate write$-$down in value, or as a loss, is less conservalve in nature.