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Tudor Co. uses the retail inventory method to estimate its inventory for interim statement purposes. Data...

Tudor Co. uses the retail inventory method to estimate its inventory for interim statement purposes. Data relating to the computation of the inventory at July 31, 2020, are as follows: Cost Retail Inventory, 2/1/20 $ 1,200,000 $ 1,580,000 Purchases 5,800,000 7,650,000 Markups, net 770,000 Sales 8,150,000 Estimated normal shoplifting losses 90,000 Markdowns, net 300,000 Under the lower-of-cost-or-market method, Tudor's estimated inventory at July 31, 2020 is $____________.

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Answer #1

Cost to retail ratio=$7,000,000/$9,230,000

Cost to retail ratio=75.84%

Thus,the ending inventory (at cost) by lower of cost or market method is $1,107,264.

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