Reference no: EM132798098

Question - The records of Serene Retail Store report the following data for the month of January 2020:

Sales P 12,000,000

Markdown P 600,000

Sales Allowance 100,000

Markdown Cancellation 100,000

Sales Returns 500,000

Freight on Purchases 100,000

Employee Discounts 200,000

Purchases at Cost 8,950,000

Normal Losses at Retail 800,000

Purchase Returns at Cost 450,000

Initial Markup on Purchases 6,200,000

Purchase Returns at Retail 600,000

Additional Markup 500,000

Beginning Inventory at Cost 600,000

Markup Cancellations 100,000

Beginning Inventory at Retail 800,000

Abnormal Losses at Cost 200,000

Abnormal Losses at Retail 250,000

Required - What is the estimated cost of goods sold using the average retail inventory method?

a. 7,550,000

b. 7,500,000

c. 5,400,000

d. 7,450,000