=+3. Total the cost and market columns and insert the lower of the two totals in the Lower of C or M column. The first item on the inventory sheet has been completed as an example.

Selected data on merchandise inventory, purchases, and sales for Clairemont Co. and Malibu Co. are as follows:

Cost Retail Clairemont Co.

Merchandise inventory, July 1 $ 300,000 $ 400,000 Transactions during July:

Purchases (net) 3,400,000 4,600,000 Sales 4,715,000 Sales returns and allowances 190,000 Malibu Co.

Merchandise inventory, February 1 $ 225,000 Transactions during February and March:

Purchases (net) 3,200,000 Sales 5,200,000 Sales returns and allowances 95,000 Estimated gross profit rate 38%

Instructions