Question: The following data concerning the conventional retail inventory method are taken from the financial records of Welch Company. Cost Retail Beginning inventory $ 196,000 $

The following data concerning the conventional retail inventory method are taken from the financial records of Welch Company.

Cost Retail

Beginning inventory $ 196,000 $ 280,000

Purchases 896,000 1,280,000

Freight-in 24,000

Net markups 80,000

Net markdowns 56,000

Sales 1,344,000

If the foregoing figures are verified and a count of the ending inventory reveals that merchandise actually on hand amounts to $144,000 at retail, the business has

realized a windfall gain.

sustained a loss.

no gain or loss as there is close coincidence of the inventories.

sustained a deferred gain.

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