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A Company used the retail inventory method to approximate the ending inventory. Cost Retail Beginning inventory 650,000 1,200,000 Purchases 9,000,000 14,700,000 Freight in 200,000 Purchase

A Company used the retail inventory method to approximate the ending inventory.

Cost

Retail

Beginning inventory

650,000

1,200,000

Purchases

9,000,000

14,700,000

Freight in

200,000

Purchase returns

300,000

500,000

Purchase allowances

150,000

Departmental transfer in

200,000

300,000

Markup

400,000

Markup cancellation

100,000

Markdown

1,200,000

Markdown cancellation

200,000

Sales

9,500,000

Sales discounts

100,000

Employee discounts

500,000

Estimated normal shoplifting loss

600,000

Estimated normal shrinkage

400,000

1. What is the estimated cost of ending inventory using the conservation approach?

2. What is the estimated cost of ending inventory using average cost approach?

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