The Rebecca Company provided the following data for its December 31, 2014, inventory maintained on the retail basis. $\begin{array}{c}
\begin{array}{lll}
\text { At Retall } \
\$ 225,000 \
446,000 \
45,750 \
(32,000) \
575,000
\end{array}
\begin{array}{lll}
\text {At Cost}\
\$ 165,000 \
275,000\
\
\
\
\end{array}
\begin{array}{lll}
\
\text {Beginning inventory}\
\text {Purchases}\
\text {Markps (net)}\
\text {Mark downs(net)}\
\text {Sales}
\end{array}
\end{array}$
What is the estimated inventory at December 31, 2014, valued at lower of average cost or market?

Question

The Rebecca Company provided the following data for its December 31, 2014, inventory maintained on the retail basis. $\begin{array}{c}
\begin{array}{lll}
\text { At Retall } \
\$ 225,000 \
446,000 \
45,750 \
(32,000) \
575,000 
\end{array}
\begin{array}{lll}
\text {At Cost}\
\$ 165,000 \
275,000\
\
\
\
\end{array}
\begin{array}{lll}
\
\text {Beginning inventory}\
\text {Purchases}\
\text {Markps (net)}\
\text {Mark downs(net)}\
\text {Sales}
\end{array}
\end{array}$
 What is the estimated inventory at December 31, 2014, valued at lower of average cost or market?

Quizplus · Accepted Answer

The estimated inventory at December 31, 2014, valued at lower of average cost or market is $67,374. This is calculated by taking the lower of the average cost of $75,000 and the market value of $67,374. The average cost is calculated by dividing the total cost of goods available for sale by the total number of units available for sale. The market value is calculated by multiplying the retail value of the ending inventory by the cost-to-retail ratio.

The Rebecca Company Provided the Following Data for Its December