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A&A products is in the process of preparing interm financial statements. Since they take physical on an annual basis they use the Retail Inventory Method to estimate inventory. Fortunately, A&A products keeps very detailed inventory records at both cost and retail. The following information for Corrugated boxes as of the end of the third quarter, 2012 is provided.
Cost. Retail
beginning inventory 92,000 167,000
purchases 220,000. 435,000
purchase discounts. 3,000
Purchase returns 8,000
markups 10,000
markup cancellation 25,000
markdowns 5000
employee discounts 9,000
Sales 430,000
* using the retail inventory method calculate ending inventory at costs for the third quarter of 2012
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