Compute the cost of the ending inventory under each of the following cost flow assumptions

Comprehensive – The EKC Company uses the retail inventory method. The following information for 2007 is available:

Cost

Retail

Cost

Retail

Inventory, January 1

$100,000

$180,000

Markdowns

$15,000

Purchases (gross price)

320,000

600,000

Markdown cancellations

4,000

Purchases discounts taken

6,000

Sales

610,000

Freight-in

16,000

Sales returns

30,000

Additional markups

60,000

Sales discounts

10,000

Markup cancellations

12,000

Required

Compute the cost of the ending inventory under each of the following cost flow assumptions:

1. FIFO

2. Average cost

3. LIFO

4. Lower of cost or market (based on average cost)

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