At the beginning of current year, Cavalier Company reported inventory of P1,000,000 at retail and P560,000 at cost During the current year, the entity registered the following purchases: Cost Retail price Original markup 4,000,000 6,200,000 2,200,000 The net sales totaled P5,400,000. The following reductions were made in the retail price: To meet price competition 50,000 To dispose of overstock 30,000 Miscellaneous reductions 120,000 During the current year, the selling price of a certain inventory increased from P200 to P300. This additional markup applied to 5,000 items but was later canceled on the remaining 1,000 items. What is the ending inventory using the average cost approach in applying the retail method? a. 2,000,000 b. 2,400,000 c. 1,240,000 d. 1,200,000