Please show all work in depth and explain as much as possible as I'm using this to study for an upcoming exam.

8. The Kansas Company provided the following data for its December 31, 2004, inventory maintained on the retail basis At Cost At Retail $120,000 $224, 000 Beginning inventory Purchases Markups (net) Markdowns (net) Sales 396,000 20,000 (40,000) 520,000 280,000 What is the estimated inventory at December 31, 2004, valued at lower of average cost or market (conventional method)? a. $53,333 b. $75,000 c. $56,000 d. $50,000