Question #15

The Springbreak Company uses the retail inventory method. Information

relating to the computation of the inventory at December 31, 2017 follows:

Freight In 9,000

Sales 268,800

Net markups 22,000

Net markdowns 30,000

Sales discounts 24,000

Sales returns 36,000

Purchases discounts 42,000

Cost Retail

Beginning Inventory 50,000 80,000

Purchases $ 240,000 $ 396,000

1. Complete using lower the cost or market retail method.
2. Complete using the average cost method.