The records for the Clothing Department of Wei's Discount Store are summarized below for the month of January (HK$ in thousands).
Inventory, January 1: at retail HK$25,000; at cost HK$17,000
Purchases in January: at retail HK$137,000; at cost HK$82,500
Freight-in: HK$7,000
Purchase returns: at retail HK$3,000; at cost HK$2,300
Transfers-in from suburban branch: at retail HK$13,000; at cost HK$9,200
Net markups: HK$8,000
Net markdowns: HK$4,000
Inventory losses due to normal breakage, etc.: at retail HK$400
Sales at retail: HK$95,000
Sales returns: HK$2,400
Instructions
a. Compute the inventory for this department as of January 31, at retail prices.
b. Compute the ending inventory using lower-of-average-cost-or-net realizable value.